The Telegraph
Since 1st March, 1999
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- The BPO bonanza and the drying up of research in India

Aggregate output generated by industries related to information technology, in the country, is likely to be around 35 billion dollars in the current fiscal year. This would amount to roughly 5 per cent of our gross domestic product. The spurt of output in this sector, overwhelmingly because of orders placed from external sources, is one reason for the close to 8 per cent rate of annual growth in GDP in recent years. Were the trend to continue, the share of IT-related industries in both GDP and exports could soon scale to greater heights.

What is taking place is bringing cheer to those who firmly believe in the philosophy of export-led growth. They are unlikely to be impressed by the suggestion that the picture could alter dramatically if any change of policy were effected in the United States of America in case organized American labour asserted itself and demanded a severe reduction in business process outsourcing.

Another facet of the ongoing developments is not easy to brush aside though. Total personnel, including executive and managerial staff, in the Indian IT sector will as of now be around 1.2 million. Such then is the arid fact of income sharing: just about one-tenth of 1 per cent of the population is at the moment appropriating as much as 5 per cent of the GDP. In case the onward march of the IT sector proves unstoppable, this skewedness in national income distribution could only aggravate; in the course of a bare decade, this minuscule segment of the national population might come to lay claim to as much as 10 per cent of our GDP. A minority of economists and other social thinkers might worry about the consequences of this emerging economic reality. Ruling politicians and opinion-builders who matter would remain unruffled.

Does that mean that the dissenting minority should consider their profession as irretrievably lost' The country’s scientific community is apparently not yet prepared to suspend their misgivings about one potential development which might affect them adversely. The proposed nuclear understanding with the US, many amongst them are convinced, would render the nation’s nuclear research programme putty clay in the hands of foreigners. Till now, the best and the brightest young Indian scientists used to discover romance while wandering in the mysterious recesses of research on fissionable particles; they were free to write their own agenda and explore horizons they themselves chose.

The circumstances would, it is feared, change drastically once the nuclear deal with the US goes through. The prospects would then, indeed, be daunting. Their freedom gone, young aspirants could well begin to walk away from basic research and seek employment in the IT industrial units. The other — and conceivably more preferred — alternative for them would be migration to the US or some other foreign country, where external interference would not come in the way of fundamental research.

Consider a generalized setting. Governments both at the Centre and in the states are under pressure to spend jointly at least 6 per cent of the GDP on education. This denouement is likely to come about soon, and a large part of the expenditure on education would get earmarked for higher education, of which a considerable proportion is to be apportioned for advanced education in the fields of science and technology. A majority of the youngsters who graduate from technical and scientific institutions would either straightaway migrate to a foreign country or join the IT sector in the country.

Those who disappear overseas as well as those who join the domestic IT-related concerns would have been trained at public expense; firms and institutions either outside or inside the country who recruit the young graduates would therefore receive finished products at zero cost. The huge returns in the domestic IT sector would be mostly on account of the investment in scientific and technical education by the Union and state governments. This should provide a unique instance of division of responsibility of a particular nature: the cost is to be borne by the government, the profits are to accrue to private tycoons.

The prospect remains bleak even if the time horizon is extended. Although the Indian IT units offer their personnel scales of remuneration that are a poor fraction of what technologists and scientists of equal calibre earn at different levels in the US, what they offer are still much, much higher than what educational institutions in India pay for teaching or research assignments. A college or university lecturer in India is, in most instances, offered all told only around Rs 12,000 per month at the beginning of his or her career. Were he or she to join the IT sector, the total remuneration received would be at least twice as much; in the successive superior rungs, the differential between what a university teacher receives and what he or she could secure in an IT-related unit gets wider and wider. A university professor, appointed in the slot at the age of, say, forty, can expect a total pay package of approximately Rs 35,000 per month; were he or she to join at IT-related unit as database administrator or software developer, the gross intake could be four or five times as much.

Pay commissions appointed by the government, it is possible to suggest, might be asked to take into account these anomalies and adjust suitably the salary scales of college and university teachers so that the trek of scientists and technologists towards the direction of the IT sector could be halted. This is more easily said than done. Pay commissions, once they begin to iron out anomalies, would have to do so on a very wide front, and not just for the educational sector. The resulting additional burden on the public exchequer could be beyond the capability of the government to bear. Conceivably, the government would be in a position to bear this burden if even the little gestures it offers to the nation’s poorest are severely curtailed. Few would suggest the taking of this route. Besides, by the time a pay commission gives its decisions, there is no gainsaying that remunerations in the IT sector would have scaled to further unreachable heights.

No point in wearing blinkers; if globalization is irresistible, the migration of the nation’s best and the brightest young minds to the US or some other foreign country in quest of better prospects, including superior research opportunities, cannot be stopped either. Of those who stay back, the intellectually better lot may expect to be absorbed by the IT-related firms; only the relatively less meritorious will join college or university appointments. Mediocre minds will make mediocre teachers and mediocre research material. It is easy to imagine the impact all this will have on the general intellectual environment in the country.

The drying up of basic research in science and technology will diminish the likelihood of significant breakthroughs in technological and scientific spheres which could help the country to develop an alternative source of growth perchance the BPO bonanza runs its course. It is precisely here that the pattern of development in China, in the recent period, differs strikingly from that in India. In China, too, soaring exports have played a part in the recent rapid growth in GDP. The bulk of such exports, however, consists not of services, but of material products marked by strong domestic linkages. India’s export performance, in contrast, is overwhelmingly linked to IT-related services dependent upon demands placed by foreigners. We have, so to say, no second line of defence should foreigners decide to change their mind and strategy.

Such is the trouble with dependent growth: it not only makes the development process vulnerable to external circumstances, but it also cripples the intellectual climate in the country, thereby impeding efforts to withstand the shock any sudden withdrawal of foreign bounty might cause. The other theme — of growing immiseration, whether absolute or relative, of the nation’s majority — is of course not for mention in gentlemanly quarters.

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