The Hindu Business Line : `No threat as of now to outsourcing'

THE Government is determined to counter the moves of the US, Germany and other European countries to restrict outsourcing of IT services to India, according to the Union Communications & IT Minister, Mr Arun Shourie.

He was addressing a press conference to announce the Software Technology Parks of India (STPI) national awards for 2001-02 and 2000-01. Mr Shourie said while the Government had taken up the issue with the countries through its embassies, his Ministry had asked the National Association of Software and Services Companies (Nasscom) and the industry to mobilise the beneficiary foreign companies to put pressure against such moves by their governments.

"There is no immediate threat of a US ban on outsourcing as the Bills introduced in this connection in New Jersey and three other States were only private members' resolutions, and not sponsored by the respective governments. In fact, American, German and other companies would become uncompetitive in the international market if they were prevented from outsourcing services to India," he stated.

The Minister said the Government would provide financial assistance to Nasscom for creating awareness among software companies about the visa rules of various countries to prevent harassment of Indian IT professionals similar to the recent incidents in Malaysia and the Netherlands. However, there was no need yet to read a pattern in such incidents.

As regards the telecom sector, Mr Shourie said the Government was in the process of finalising a totally transparent procedure for procurement of telecom equipment by MTNL and BSNL. The new procedure would completely reform the tendering process, stipulating that the contract should be awarded only on the basis of firm prices, against the current practice of provisional prices.

He said that the Ministry had a meeting with telecom equipment manufacturers and suppliers on Monday and would convene another meeting after finalising the proposals by the end of this month. At present, his Ministry did not interfere in the procurement process of the two companies. Their respective boards were entirely responsible for the process, he said.

The Government planned to introduce a rolling calendar system for the two companies in the next six months wherein tenders would be placed in the first quarter of every financial year. There is also a proposal to decentralise the procurement process.

Earlier, the Minister announced that Tata Consultancy Services (TCS) and Infosys Technologies Ltd had been chosen for the STPI national awards for 2001-02 and 2000-01 respectively. While TCS topped the software exports in 2001-02 with an export value of Rs 2,657.41 crore, the honour had gone to Infosys in the previous year (Rs 1,773.32 crore).

Under the small and medium enterprises category, the first three positions for 2001-02 have been taken by e-Service International Ltd, Mumbai with a growth rate of 268 per cent, HSBC Electronic Data Processing India Pvt Ltd, Hyderabad (261 per cent growth) and Deloitte Consulting India Pvt Ltd, Hyderabad, (182 per cent). For 2000-01, the awards have been bagged by Aztec Software and Technologies Services Ltd, Bangalore (470 per cent) and, PSI Data Systems Ltd, Bangalore (363 per cent).

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