Fw: India's Software Exports: Reply to Mr. Aggarwal (addendum)

["Dr. Subroto Roy" <sroy@vgsom.iitkgp.ernet.in>]

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Reading Mr. Aggarwal's statement more carefully, I find

> > Indian software services firms win orders from international clients
to
> > develop new applications or to modify the client's existing
applications.

I am sure this is right.  Now consider for example

--- "to modify the client's existing applications"....

Is "the client's existing applications" something being recorded in the
accounts of the Indian software company as an input or a liability or an

expenditure?  So for example, the existing application is recorded in
the
accounts as worth $x million, to which $y million value addition occurs
by
way of e.g. new code being written in India?    I am admittedly ignorant
of
precisely what is happening here, but so is, I believe, everyone else,
including McKinsey/Nasscom.

This is a point I have also made to my students and also one I made in
Bangalore and also in Hyderabad in the last few months;  if I am right
in
pointing out a fallacy which has been widely broadcast in the country
and
elsewhere, and some alleged management consultant then steals it and
broadcasts it for himself/herself, remember folks where you heard it
first....

Subroto Roy






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