The Hindu Business Line : Call to put down bandh-hartal farce in Kerala for BPO bonanza

THE bandh-hartal jinx in Kerala has cost the State dearly in terms of investments in business process outsourcing and health tourism and it is high time concerned citizens called the bluff of its perpetrators, according to Mr G. Vijaya Raghavan, technocrat and founder CEO of Technopark.

In an open letter to the Chief Minister, leaders of political parties, intellectuals and captains of industry, Mr Vijaya Raghavan said one of the primary reasons for the booming BPO activity bypassing Kerala is hartals that occur more often and with more severity than in the rest of the country.

The situation has come to a situation where remittances from outside (non-residents are variously estimated to contribute Rs 25,000 crore per annum) are depended on more than ever before in order to keep the State afloat.

All visible signs of prosperity - retailing boom in manufactured products sourced from the rest of the country, educational institutions, hospitals and the hectic construction activity - are largely financed by the `unearned income' of residents.

The impending elections have presented the common man with the best opportunity to say `No' to those `who said yes to bandhs and hartals', he said.

Elaborating, he said that when trade unions closed down a factory in the past, only a few hundred jobs were lost. But when the whole State is paralysed by the call of a hartal or general strike, the damage it does and the signals it sends out are horrendous.

Outsourcing is considered one of the biggest trends reshaping the global economy. The shortages of employable workforce by 2020 are estimated to be 170 lakh in the US, 100 lakh in China, 90 lakh in Japan, 60 lakh in Russia, 30 lakh in France and 20 lakh each in the UK and Italy.

To sustain the existing level of living standards, these countries will have to either allow immigration or send many of the jobs out through outsourcing even if they manage to improve the productivity significantly.

India will be the single largest source of surplus employable workforce (estimated to be 470 lakh by 2020) with the widest range of skill-sets to meet the global shortage.

Economics of outsourcing are so compelling, being a win-win proposition to both developed as well as developing countries. So far only a fraction of the companies are engaged in outsourcing and only a fraction of the services that can be outsourced are being actually outsourced.

Most of the BPO firms are located in and around Delhi, Bangalore, Mumbai, Chennai and Hyderabad. Although Kochi has tremendous cost advantages, the number of units the city has attracted is extremely few.

The obvious reason is that Kerala does not provide such an environment or work culture.

In a similar manner, the State's strengths in health tourism are well-documented. Leading hospitals combining their resources for a joint campaign to promote the State as a destination for high-quality, low-cost medical services is eminently workable.

More Stories on : Trade & Labour Unions | Outsourcing | Kerala

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