Reply to Mr. Aggarwal

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

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> Dr. Roy,
>
> Let's start with a few basic questions.
>
> If an Indian software company, announces that its revenues for a given
> period were, for example, $100 million, 98% of which were exports.  And
> that
> these figures have been "independently verified" by the company's
> financial
> auditors.  Would you accept the $98 million figure as a valid basis of
> measurement for that company's exports for the given period?

--- Prima facie, of course, but we would not be concerned with the absolute
figure of revenues so much as the profitability of the company, which
implies looking at its cost-side as well, i.e. the balance sheet,
income/expenditure, cash-flows and financial ratios.

> Likewise, when Reliance announces that its chemical exports are X, or
> when > Ford (India) announces it exported Y worth of vehicles, would you
accept  those figures?


-- yes, similarly, though the Ford example or e.g. Maruti-Suzuki is
excellent, as the point regarding value-addition within Indian shores
becomes obvious too.
>
> The empirical evidence, such as:
> - construction of IT parks in software cities such as Bangalore,
> Hyderabad,
> etc,

-- I was happy to be a guest there recently, and made my point there too...

> - the high visibility of Indian programmers working in US companies
> - high profile US companies announcing major investments and/or
> expansion of
> their India software development centers.

--- certainly, absolutely, no question about it.... our people are I am sure
good and relatively inexpensive.... e.g. I recall a Silicon Valley Indian
entrepreneur telling me as of 19991 that he was paying $20,000 per Indian
engineer for work sourced out to Bangalore which would have cost him $70,000
at the time if he paid an American engineer (especially given the latter's
health benefits) to do the same....

But if the same Indian engineer leaves the shores of India and does the work
at the client's site, it may accrue to India's GNP but will not accrue to
India's GDP.


> suggest that the software export phenomenon is for real

-- the "people export" phenomena has been real from India for generations;
e.g. in the late 1960s/early 1970s  it was Indian doctors who got green
cards freely in the States for a while; then there was a similar boom in
export of "human capital" to the Gulf; and now of software folks to the
West....

and will have a
> major impact on the Indian economy, if it can be sustained.

-- what impact has there been on India's economy by exporting as many
medical doctors as we did to the American or British economies thirty years
ago?

"Whether
> the
> actual software export figures is X or Y?" is not as important a
> question as
> "how can we sustain or even accelerate India's software export growth
> rate?".  Focusing the discussion on the latter, would, I feel, be a more
>
> constructive use of your time with respect to improving the Indian
> economy -
> rather than quibbling about the numbers.

-- Nope.   I am not quibbling.  I am saying the Emperor has no clothes...
that Nasscom is an industry group and industry lobby in New Delhi's
policy-making circles, and that economic policy should not be subject to
lobbying by them or anyone else to the extent possible.

Subroto Roy
>
>
>
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> This is the National Debate on System Reform.       debate@indiapolicy.org
> Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
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This is the National Debate on System Reform.       debate@indiapolicy.org
Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
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