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Wednesday, Aug 28, 2002

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Industry & Economy - Labour Reforms

Firms, Govt depts allowed to outsource non-core work

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NEW DELHI, Aug. 27

THE Government today said that the issue of flexibility in labour laws should be approached with "caution'' even as it gave its stamp of approval for business organisations and Government departments to outsource their non-core activities and functions that do not directly create value for the customers or their shareholders.

"Flexible laws have to be interpreted with caution, keeping in mind that any such flexibility should not adversely affect the state of labour and at the same time, not hamper the cause of the industry'', the Minister of State for Communications and Information Technology, Dr Sanjay Paswan, said at an Assocham seminar on business process outsourcing (BPO) here.

He pointed out that India had abundant human resources and that there was a need to generate a feeling of pride and confidence among them in order to draw their optimum potential.

He maintained that the Government was on the same wavelength as that of the industry on the scope of growth for the BPO sector and was only expressing certain reservations on the issue of flexibility in labour laws.

A recent survey of Assocham on BPO had raised the issue of bringing about changes in the existing labour laws and making them more flexible to suit the requirements of the industry.

Captains of industry with BPO interests were of the view that time should not be lost in taking advantage of the business opportunities available to India in this area. "We don't have the luxury of time as there are other countries who can provide similar services at the same or lower rates'', Mr Sanjay Dwivedi, Chief Executive Officer, Spectra Net Ltd, said.

Mr N.V. Tyagarajan, Chief Executive Officer (CEO), GE Capital International Services, said India was well positioned to ride the BPO wave. He, however, felt that Indian companies should constantly look at moving towards the higher end of the value chain. "Low-end work will soon get commoditised and it will disappear'', he added.

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