If you are young and restless and into the stock markets then this is for you.
For the Indian stock markets are caught in a whirlwind and you might need a straw to hold on to something. Some words of wisdom, some nuggets that may help you to relax, howsoever often you may have heard them before.
Waking up this morning would you have imagined the 30-stock benchmark index, the Sensex, would crash by more than 1,500 points after noon?
The US markets seemed a bit stable with the Dow Jones down by about 0.5 per cent. The Indian stocks too had been on a downslide since January 15. However, the shock and awe that the Sensex witnessed today must have made a few of the weak-hearted amongst you stop and take heed.
Weak-hearted we all are but if you also have some patience -- considering your age -- here's what you should keep in mind to weather stock market turbulences.
1. Start nibbling in
If you believe in India's growth story every steep fall should be seen as a buying opportunity. If you haven't yet entered the market but want to then tighten your belts. Market crash like the one today is an ideal time to buy. However, since these are very tumultuous times don't put all your eggs in one basket.
That is, if you have Rs 100 to invest then put only Rs 25 or even less during such crashes. If you have heart for some risk then put Rs 25 out of that Rs 100 today and keep the rest for later. However, do this only if you are willing to stake your money for at least five-seven years. The long-term stock market story in India still looks positive.
2. Don't panic
If you are already invested in the market and are sitting on huge losses, don't panic. The macro economic story in India led by the consumption, infrastructure and engineering sectors still have chances to remain insulated from what's happening in the US markets. This because many believe that the US recession is responsible for the current weakness across global markets.
If the US can't buy our goods, no problem. India and Indians have the purchasing capacity believe some experts, who say that the US recession will not have a huge impact on the Indian growth story.
Make money with shares
Moreover, India's demographics, skewed heavily in favour of the young, will help India overcome external pressures in the long run. Young Indians like you are spending more on their daily needs thereby increasing the consumption demand.
So if you are a brave heart and believe that there are bound to be minor hiccups along the way this is your time. Add more and good quality stocks to your portfolio.
3. Avoid averaging
If you are a short-term trader and think that you can buy more of the same stocks to average your buying price then you may be in for a rough ride. Nobody knows for sure about which direction the markets will take in the weeks ahead.
Any bad news coming from global giants like the US, Europe and China can only have multiplier effects. If the markets were to tank further your losses are likely to increase manifold. So book your losses and get out of the market.
However, if you want to invest with a long-term perspective start nibbling in on good quality stocks.
4. Don't go by tips
If you are young and eager to make money then you are an ideal target for those who give stock tips. They will start flying thick and fast from tomorrow. Or may have started doing rounds even today for all we know. Some of your friends will ask you to buy stocks; some other will advise you to sell them.
Greed = Loss at the stock market
Agreed you will find a lot many stocks at prices far lower than what they were a fortnight ago. Check for their credentials. For this is the time when gullible investors go for the bait thrown by stock market manipulators. Don't buy any stock merely because a broker or a market punter advised you to.
Similarly, there will be a host of technical advisors jostling for your attention. "This particular stock looks weak on the charts. Traders can make some profits by selling them now and buying the same at lower levels with strict stop losses." Shun the thought. For you never know when the markets will bounce back.
Bottom line: don't trade on tips. Better still don't trade at all. Go for long-term investments. For the time being forget what Lord Maynard Keynes said: "In the long-term we are all dead."
God knows what will happen in the long-term but in the current scenario if you were to act on tips then you will only be responsible for your own ruin.
5. Mutual funds are your best friends
In such times let experts manage your money if you find stock markets to be a hot potato. Put your money in mutual funds for the mutual fund manager is a market expert and is assisted by a big team of market specialists. A decision made by a team of experts will help you make far greater profits than what you will try to do on your own.
The stock market hammering of the last few days should be taken as an opportunity to buy into good diversified equity funds. For, they put their money into the markets irrespective of any sector, theme, or market cap limitation.
When the markets will bounce back they will have a far higher chance of appreciating faster than any other type of mutual funds.
6. Don't try to time the markets
As an individual you are in no way going to buy when the market falls and sell when the market rises. Believe in investing money into stocks or mutual funds' systematic investment plans, SIPs, regularly. This is the only key to avoid getting ruined in the stock markets.
Want to bid for shares? Read this first
The stock market crashes -- like the one witnessed today -- get evened out by long-term gains. For instance, those who had been regularly investing from the time markets crashed steeply during the May 2006 crash would not feel bothered about the crash today.
The market had crashed to some 12,000 points then from about 16,000 levels in just a month's time. Today even after the crash the market was trading at 17,000 plus levels.
Remember that age is on your side. If you are in your early, mid or late twenties then this is the right time for you to put your money in stock markets. Historically, stock market gains have outweighed gains from other asset classes over 10-year, 15-year and 20-year time horizons.
Who knows, by the time you are in your 40s or 50s, twenty years from this day, you might look back at this crash as your first stepping stone towards building wealth for yourself and your family.
Monday 3 March 2008
Olympic hockey qualifier: India crush Austria
India recovered from a shaky start to beat Austria 7-3 for their second consecutive win in the World Hockey Olympic qualifying tournament at the Prince of Wales Country Club in Santiago.
Rocked by a second minute goal, India bounced back in a splendid fashion as Dilip Tirkey (9th, 23rd minutes), Shivendra Singh (51st, 55th), Ignace Tirkey (42nd), Bharat Chhikara (53rd) and Rajpal Singh (53rd) struck telling blows.
In the day's other matches, Britain whipped Russia [Images] 8-0 while hosts Chile, who lost to Austria, beat Mexico 4-0 for their first win.
Austria, who went into the lead when Robert Buchta scrambled the ball in from a counter-attack in the second minute, kept India on their toes with two penalty-corner conversions by Christian Minar (28th, 59th).
India trounce Russia
But India, after a poor start with their midfield play in tatters, made up for their first-half lapses with splendid attacking hockey in the second-half when they scored five goals in 13 minutes to take the game away from the Austrians.
Satisfying victory: Carvalho
The Indians were surprisingly tentative against the European outfit that solely depended on quick counter-attacks, which fetched them no fewer than seven penalty-corners. But the Austrian penalty-corner drill was rather predictable and the Indians were fortunate to get away lightly.
For much of the first-half, the Austrians matched their fancied rivals move for move and goal for goal, giving the Indians many an anxious moment.
However, with the change of ends, the complexion of the game turned dramatically with India going on the rampage. The Austrian defence was simply torn apart by the speed and skill of the Indian forwards who evoked memories of their 7-2 drubbing of Korea in the 2007 Asia Cup final at Chennai.
It was honours even at half-time with Austria surprising the fancied Indians with pacy counter-attacks that stretched the rival defence thin. India, forced to frequently back-pedal, tended to panic and committed a host of mistakes, most of which however went unpunished.
With the Indian midfield surprisingly ragged, Austria scored in the second minute. A diagonal ball from left to right caught the Indian defence napping. Benjamin Stanzl beat full-back William Xalco on the turn, ran 15 yards before crossing to Buchta who swatted home.
The Indians were quick to recover from the early setback and forced a penalty-corner that Dilip Tirkey converted with a well-angled hit to restore parity.
Gaining in confidence, India stepped up the pressure and received their second penalty-corner. Yet again, Dilip Tirkey was successful with a direct hit and India went 2-1 up.
Thereafter, the Indians forced most of the moves, but further success eluded them as they wasted their third penalty-corner as Dilip Tirkey's shot was easily parried.
On the counter-attack, Austria penetrated a slow-moving Indian defence and forced two back-to-back penalty corners. Goalkeeper Baljit Singh blocked the first attempt from Minar, but the Austrian specialist came good with his next try, again a direct hit.
At this stage, the drag-flick specialist V Ramachandra Raghunath came off the bench, but India did not get another penalty-corner as the teams went into half-time on level terms.
On resumption, India showed urgency and kept Austria under pressure and took 3-2 lead in 42nd minute. Xalco's long hit into circle came off goalkeeper's pads. Ignace Tirkey gained possession, did a half-turn and let fly a reverse hit to the net.
India then took stranglehold of the match with a four-goal blitz in as many minutes. Shivendra picked up a waist-high rebound and swatted home for the fourth goal in the 51st minute, Chhikara made it 5-2 with a reverse hit after Shivendra set him up in the 53rd, before Sardara schemed two goals for Rajpal (6-2) and Shivendra (7-2) to score in the 53rd and 55th minutes, respectively.
With a five-goal cushion, India relaxed for just a moment and Austria in a trice forced their sixth penalty-corner that Minar converted in the 59th minute. Thereafter, the match meandered into an up and down affair and the Indians came away with palpable relief.
Complete hockey coverage
Rocked by a second minute goal, India bounced back in a splendid fashion as Dilip Tirkey (9th, 23rd minutes), Shivendra Singh (51st, 55th), Ignace Tirkey (42nd), Bharat Chhikara (53rd) and Rajpal Singh (53rd) struck telling blows.
In the day's other matches, Britain whipped Russia [Images] 8-0 while hosts Chile, who lost to Austria, beat Mexico 4-0 for their first win.
Austria, who went into the lead when Robert Buchta scrambled the ball in from a counter-attack in the second minute, kept India on their toes with two penalty-corner conversions by Christian Minar (28th, 59th).
India trounce Russia
But India, after a poor start with their midfield play in tatters, made up for their first-half lapses with splendid attacking hockey in the second-half when they scored five goals in 13 minutes to take the game away from the Austrians.
Satisfying victory: Carvalho
The Indians were surprisingly tentative against the European outfit that solely depended on quick counter-attacks, which fetched them no fewer than seven penalty-corners. But the Austrian penalty-corner drill was rather predictable and the Indians were fortunate to get away lightly.
For much of the first-half, the Austrians matched their fancied rivals move for move and goal for goal, giving the Indians many an anxious moment.
However, with the change of ends, the complexion of the game turned dramatically with India going on the rampage. The Austrian defence was simply torn apart by the speed and skill of the Indian forwards who evoked memories of their 7-2 drubbing of Korea in the 2007 Asia Cup final at Chennai.
It was honours even at half-time with Austria surprising the fancied Indians with pacy counter-attacks that stretched the rival defence thin. India, forced to frequently back-pedal, tended to panic and committed a host of mistakes, most of which however went unpunished.
With the Indian midfield surprisingly ragged, Austria scored in the second minute. A diagonal ball from left to right caught the Indian defence napping. Benjamin Stanzl beat full-back William Xalco on the turn, ran 15 yards before crossing to Buchta who swatted home.
The Indians were quick to recover from the early setback and forced a penalty-corner that Dilip Tirkey converted with a well-angled hit to restore parity.
Gaining in confidence, India stepped up the pressure and received their second penalty-corner. Yet again, Dilip Tirkey was successful with a direct hit and India went 2-1 up.
Thereafter, the Indians forced most of the moves, but further success eluded them as they wasted their third penalty-corner as Dilip Tirkey's shot was easily parried.
On the counter-attack, Austria penetrated a slow-moving Indian defence and forced two back-to-back penalty corners. Goalkeeper Baljit Singh blocked the first attempt from Minar, but the Austrian specialist came good with his next try, again a direct hit.
At this stage, the drag-flick specialist V Ramachandra Raghunath came off the bench, but India did not get another penalty-corner as the teams went into half-time on level terms.
On resumption, India showed urgency and kept Austria under pressure and took 3-2 lead in 42nd minute. Xalco's long hit into circle came off goalkeeper's pads. Ignace Tirkey gained possession, did a half-turn and let fly a reverse hit to the net.
India then took stranglehold of the match with a four-goal blitz in as many minutes. Shivendra picked up a waist-high rebound and swatted home for the fourth goal in the 51st minute, Chhikara made it 5-2 with a reverse hit after Shivendra set him up in the 53rd, before Sardara schemed two goals for Rajpal (6-2) and Shivendra (7-2) to score in the 53rd and 55th minutes, respectively.
With a five-goal cushion, India relaxed for just a moment and Austria in a trice forced their sixth penalty-corner that Minar converted in the 59th minute. Thereafter, the match meandered into an up and down affair and the Indians came away with palpable relief.
Complete hockey coverage
Tendulkar hits back at critics
Sachin Tendulkar [Images] hit back at his critics who questioned his inability to strike form in one-day cricket of late, saying he does not bother about the comments of those without any credibility.
Tendulkar scored an unbeaten 117 to guide India to a six-wicket win against Australia in the first of the best of three tri-series finals.
"A lot of those people who can't do certain things themselves, they talk, so let them talk," Tendulkar said.
Stats: Tendulkar breaks Aussie jinx
"I look at the credibility of the person who is writing. I prefer to listen to those people who matter to me. They do pick up the phone and tell me," he said.
Tendulkar said he is thrilled to get the century and more so because it was a match-winning effort.
"Yes, to score a century in Australia was something I wanted to do. It was also a terrific occasion to do so," said Tendulkar, whose unbeaten 42nd century sank the hosts.
He also talked about the niggles which hampered his progress during his innings as well as the beamer from Brett Lee [Images] which hit him smack on his shoulder.
Ponting asks team to learn from Tendulkar
"There has been a niggle in the groin which hasn't been allowing me to move freely. Still you try to push yourself. It was little difficult as I was cramping also.
"As for the beamer, I know Brett pretty well. It wasn't intentional. I jokingly told him that when he comes to play the IPL [Indian Premier League], he would have to face one from my son who is a great fan of his. There surely are no hard feelings."
Important as Tendulkar's innings was, his 123-run fourth wicket stand with Rohit Sharma was equally critical.
"I've played a few games with him [Rohit] but this was the first time we had a long stand. He is extremely calm and composed and that's his strength. He showed terrific character and has a wide range of shots. What's more his shot selection was also very good. I definitely think he has a great future."
Aussie media target Harbhajan again
On the youngsters in the side, Tendulkar said: "they are extremely talented. Being a senior you want to share your knowledge. They also come and tell me a lot of things."
Asked if he felt lonely in the dressing room being such a senior pro, Tendulkar replied: "as for being lonely, once you are selected to play for India, you have got to do certain things. I have always tried to be open and friendly and they are also allowed to crack jokes."
Tendulkar said he does not want to publicly specify the important aspects of skipper Mahendra Singh Dhoni's [Images] leadership.
"Dhoni has done a terrific job, without any doubt, and we all have enjoyed," he said.
The little master did not think it is uncomfortable at all to open the innings with different partners.
"I am prepared to open with anyone, you can't stick with the same idea all the time. There are different ideas and to implement them you do certain things," Tendulkar added.
Tendulkar scored an unbeaten 117 to guide India to a six-wicket win against Australia in the first of the best of three tri-series finals.
"A lot of those people who can't do certain things themselves, they talk, so let them talk," Tendulkar said.
Stats: Tendulkar breaks Aussie jinx
"I look at the credibility of the person who is writing. I prefer to listen to those people who matter to me. They do pick up the phone and tell me," he said.
Tendulkar said he is thrilled to get the century and more so because it was a match-winning effort.
"Yes, to score a century in Australia was something I wanted to do. It was also a terrific occasion to do so," said Tendulkar, whose unbeaten 42nd century sank the hosts.
He also talked about the niggles which hampered his progress during his innings as well as the beamer from Brett Lee [Images] which hit him smack on his shoulder.
Ponting asks team to learn from Tendulkar
"There has been a niggle in the groin which hasn't been allowing me to move freely. Still you try to push yourself. It was little difficult as I was cramping also.
"As for the beamer, I know Brett pretty well. It wasn't intentional. I jokingly told him that when he comes to play the IPL [Indian Premier League], he would have to face one from my son who is a great fan of his. There surely are no hard feelings."
Important as Tendulkar's innings was, his 123-run fourth wicket stand with Rohit Sharma was equally critical.
"I've played a few games with him [Rohit] but this was the first time we had a long stand. He is extremely calm and composed and that's his strength. He showed terrific character and has a wide range of shots. What's more his shot selection was also very good. I definitely think he has a great future."
Aussie media target Harbhajan again
On the youngsters in the side, Tendulkar said: "they are extremely talented. Being a senior you want to share your knowledge. They also come and tell me a lot of things."
Asked if he felt lonely in the dressing room being such a senior pro, Tendulkar replied: "as for being lonely, once you are selected to play for India, you have got to do certain things. I have always tried to be open and friendly and they are also allowed to crack jokes."
Tendulkar said he does not want to publicly specify the important aspects of skipper Mahendra Singh Dhoni's [Images] leadership.
"Dhoni has done a terrific job, without any doubt, and we all have enjoyed," he said.
The little master did not think it is uncomfortable at all to open the innings with different partners.
"I am prepared to open with anyone, you can't stick with the same idea all the time. There are different ideas and to implement them you do certain things," Tendulkar added.
Ponting asks team to learn from Tendulkar
Australia captain Ricky Ponting [Images] on Sunday asked his batsmen to take a leaf out of Sachin Tendulkar's masterclass at the Sydney Cricket Ground if they want to beat India in the second tri-series final in Brisbane on Tuesday.
"I would like our batsmen to take a look at how he [Tendulkar] built an innings. He had a few close shaves to start with but once he got through the new ball, he upped the tempo of his innings and controlled the game beautifully," said a subdued Ponting after his side's six-wicket defeat.
Statistics: Tendulkar breaks Aussie jinx
"Tendulkar sums up a game situation very well, that's something we would require our batsmen to do and go for big knocks when set."
Ponting said Tendulkar appeared to plan ahead of what his team was trying to do against him.
"He has some sort of plan what we are trying to do. We have to think one step ahead of him," he said.
Ponting also didn't lose sight of young Rohit Sharma, the other Indian batting star of the night.
"He played very well. He rotated the strike nicely and kept the scoreboard ticking over. He looks pretty calm and controlled. His stand with Tendulkar was one of the big moments of the game," he said.
Dhoni: Poster boy of Indian cricket
Ponting conceded that the visitors have their nose in front of them and his team would have to lift themselves in all departments of the game in the next match at the Gabba.
"In that Melbourne game [on February 29] I thought we were switched off. We were too excited to plan for finals. But today, we didn't do a good job with bat, ball or in the field.
"We pride ourselves for doing well in big games, in finals, but it didn't happen today."
Ponting mentioned his own failure with the bat as one of the major reasons why his team couldn't turn up the heat against India.
"I have worked harder at the end of the season than at the start of it but haven't got rewards.
"Top order, including me, has to fire but most of this summer it hasn't happened and I take responsibility for that.
"Overall, I felt the batsmen had done a reasonable job in reaching 240 and I thought it was defendable. The bottom line is we didn't bowl, field or bat as well as India did."
Having praised Tendulkar and Rohit Sharma, Ponting also had kind words on young leg-spinner Piyush Chawla and felt the two wickets by Harbhajan Singh [Images] changed the complexion of the game.
"He [Chawla] did a good job but we couldn't get aggressive against him because we had lost a few wickets.
"As for those two wickets [of Harbhajan], it was one of those defining moments. Otherwise, we could have got 270.
"It just goes to show that you can't afford to relax for even one ball. As a batsman, you can't take your mind off the accelerator or else the whole momentum can change."
The Australian skipper also conceded that it is difficult to keep the mind of the team away from the off-field happenings of recent times.
"It's hard to get away from it in the last few months. It's been hard to turn your back completely but truly speaking, most of us haven't paid a lot of attention to it."
"I would like our batsmen to take a look at how he [Tendulkar] built an innings. He had a few close shaves to start with but once he got through the new ball, he upped the tempo of his innings and controlled the game beautifully," said a subdued Ponting after his side's six-wicket defeat.
Statistics: Tendulkar breaks Aussie jinx
"Tendulkar sums up a game situation very well, that's something we would require our batsmen to do and go for big knocks when set."
Ponting said Tendulkar appeared to plan ahead of what his team was trying to do against him.
"He has some sort of plan what we are trying to do. We have to think one step ahead of him," he said.
Ponting also didn't lose sight of young Rohit Sharma, the other Indian batting star of the night.
"He played very well. He rotated the strike nicely and kept the scoreboard ticking over. He looks pretty calm and controlled. His stand with Tendulkar was one of the big moments of the game," he said.
Dhoni: Poster boy of Indian cricket
Ponting conceded that the visitors have their nose in front of them and his team would have to lift themselves in all departments of the game in the next match at the Gabba.
"In that Melbourne game [on February 29] I thought we were switched off. We were too excited to plan for finals. But today, we didn't do a good job with bat, ball or in the field.
"We pride ourselves for doing well in big games, in finals, but it didn't happen today."
Ponting mentioned his own failure with the bat as one of the major reasons why his team couldn't turn up the heat against India.
"I have worked harder at the end of the season than at the start of it but haven't got rewards.
"Top order, including me, has to fire but most of this summer it hasn't happened and I take responsibility for that.
"Overall, I felt the batsmen had done a reasonable job in reaching 240 and I thought it was defendable. The bottom line is we didn't bowl, field or bat as well as India did."
Having praised Tendulkar and Rohit Sharma, Ponting also had kind words on young leg-spinner Piyush Chawla and felt the two wickets by Harbhajan Singh [Images] changed the complexion of the game.
"He [Chawla] did a good job but we couldn't get aggressive against him because we had lost a few wickets.
"As for those two wickets [of Harbhajan], it was one of those defining moments. Otherwise, we could have got 270.
"It just goes to show that you can't afford to relax for even one ball. As a batsman, you can't take your mind off the accelerator or else the whole momentum can change."
The Australian skipper also conceded that it is difficult to keep the mind of the team away from the off-field happenings of recent times.
"It's hard to get away from it in the last few months. It's been hard to turn your back completely but truly speaking, most of us haven't paid a lot of attention to it."
The coming death of Indian outsourcing
India is riding high on outsourcing.
Information technology and IT-enabled services will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India's foreign-exchange inflows, according to Nasscom, an Indian IT industry organization.
The death of this industry is far from anyone's mind.
Slideshow: The 25 fastest-growing tech companies
Slideshow: Where India outsources
Slideshow: Five reasons to hire full-time IT help
However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.
Jobs that are low value-added and easily automatable should and will disappear over the next decade.
People talk a lot about India moving up the value chain. Some of that has indeed happened. An industry that started gaining momentum when Indian software developers were tapped to help fix the 'Y2K' problems in old software code has blossomed beautifully into one that offers a much more comprehensive spectrum of services.
Yet, India, for all its glory, is still the world's back office. India's tech industry is a "services" industry. The Indians don't do the thinking. The customers do. India executes.
As a result, India has not learned to invent technology products of its own. Barring a few exceptions, the huge amount of venture capital chasing India finds it difficult to be deployed. There is way too much money, way too few deals. Instead, tech-sector VCs are now diverting capital to retail, real estate, hotels and other non-tech sectors.
India's $30 billion IT/ITES services industry, meanwhile, is slowly and surely losing its competitive advantage.
Slideshow: Outsourcing atlas
Slideshow: A brief history of tech CEO apologies
Most of the 4 million people that the industry employs have now "arrived." They have breezed through the milestones that their fathers had to toil all their lives to reach. A phone. A watch. A TV. A car. A house.
They are complacent. They will not take risks. They have "outsourced" thinking to their customers.
As the 1:3 cost structure becomes 1:1.5, it will soon become inefficient to use Indian labor. Why not Oklahoma or British Columbia? For many Europeans, Eastern Europe has already become more compelling than India. The pure labor arbitrage equation will no longer balance.
ADP, the largest U.S. payroll services provider, has 45,000 employees worldwide, of which only 2,500 are in India. It has around 1,000 workers in El Paso, Texas, it's expanding a location in Augusta, Ga., and it's opening a facility in Jackson, Miss. It's also growing a location in Halifax, Canada. ADP isn't moving its workforce to India--it's hedging its bets geographically. On a recent earnings call, ADP's chief executive used terms such as "smartshoring," and "nearshoring" to describe the strategy.
The software as a service (SaaS) megatrend in technology also plays against India.
Here's an example: There's a tiny Silicon Valley start-up called InsideView. It helps customers to generate sales leads, qualify those leads and use technology tools to help find big sales opportunities for customers.
In November 2007, InsideView acquired a company called TrueAdvantage, which did the exact same thing manually with a team of 150 people in India. After the acquisition, InsideView moved all 2,500 of TrueAdvantage's customers over to its SaaS solution. All 150 TruAdvantage employees in India were laid off.
That's been a familiar tale in Detroit--but no so far in India. But that's changing.
Indian powerhouses like Infosys [Get Quote] and Wipro [Get Quote] must diversify their portfolios away from pure body-shopping and process competencies to technology-driven advantages. They, too, could build--or acquire--SaaS businesses.
So far that's not happening. Infosys is still hiring thousands of new employees in India every year. The mood is upbeat. Nasscom is forecasting 25% annual growth in the Indian IT services industry for the next few years. The golden goose is still laying large, warm eggs, enough to feed the 4 million and their families, servants, chauffeurs and cooks.
Meanwhile, the workforce is getting comfortable in their cubicle chairs, just as the turkey gets comfortable before Thanksgiving.
Forbes recently published some scary statistics on wage inflation in India. Salaries rose 15.1% in 2007, up from 14.4% the previous year. The 2008 forecast: 15.2%. This would be the fifth consecutive year of salary growth above 10%.
Add to that the appreciation of the rupee against the weakening dollar, and its impact on the labor arbitrage market.
Is the death of Indian outsourcing all that far off?
Assuming a 15% year-to-year salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, if US wages remain constant, India's cost advantage disappears by 2015. Then what?
Slideshow: Aceing an outsourced job interview
Information technology and IT-enabled services will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India's foreign-exchange inflows, according to Nasscom, an Indian IT industry organization.
The death of this industry is far from anyone's mind.
Slideshow: The 25 fastest-growing tech companies
Slideshow: Where India outsources
Slideshow: Five reasons to hire full-time IT help
However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.
Jobs that are low value-added and easily automatable should and will disappear over the next decade.
People talk a lot about India moving up the value chain. Some of that has indeed happened. An industry that started gaining momentum when Indian software developers were tapped to help fix the 'Y2K' problems in old software code has blossomed beautifully into one that offers a much more comprehensive spectrum of services.
Yet, India, for all its glory, is still the world's back office. India's tech industry is a "services" industry. The Indians don't do the thinking. The customers do. India executes.
As a result, India has not learned to invent technology products of its own. Barring a few exceptions, the huge amount of venture capital chasing India finds it difficult to be deployed. There is way too much money, way too few deals. Instead, tech-sector VCs are now diverting capital to retail, real estate, hotels and other non-tech sectors.
India's $30 billion IT/ITES services industry, meanwhile, is slowly and surely losing its competitive advantage.
Slideshow: Outsourcing atlas
Slideshow: A brief history of tech CEO apologies
Most of the 4 million people that the industry employs have now "arrived." They have breezed through the milestones that their fathers had to toil all their lives to reach. A phone. A watch. A TV. A car. A house.
They are complacent. They will not take risks. They have "outsourced" thinking to their customers.
As the 1:3 cost structure becomes 1:1.5, it will soon become inefficient to use Indian labor. Why not Oklahoma or British Columbia? For many Europeans, Eastern Europe has already become more compelling than India. The pure labor arbitrage equation will no longer balance.
ADP, the largest U.S. payroll services provider, has 45,000 employees worldwide, of which only 2,500 are in India. It has around 1,000 workers in El Paso, Texas, it's expanding a location in Augusta, Ga., and it's opening a facility in Jackson, Miss. It's also growing a location in Halifax, Canada. ADP isn't moving its workforce to India--it's hedging its bets geographically. On a recent earnings call, ADP's chief executive used terms such as "smartshoring," and "nearshoring" to describe the strategy.
The software as a service (SaaS) megatrend in technology also plays against India.
Here's an example: There's a tiny Silicon Valley start-up called InsideView. It helps customers to generate sales leads, qualify those leads and use technology tools to help find big sales opportunities for customers.
In November 2007, InsideView acquired a company called TrueAdvantage, which did the exact same thing manually with a team of 150 people in India. After the acquisition, InsideView moved all 2,500 of TrueAdvantage's customers over to its SaaS solution. All 150 TruAdvantage employees in India were laid off.
That's been a familiar tale in Detroit--but no so far in India. But that's changing.
Indian powerhouses like Infosys [Get Quote] and Wipro [Get Quote] must diversify their portfolios away from pure body-shopping and process competencies to technology-driven advantages. They, too, could build--or acquire--SaaS businesses.
So far that's not happening. Infosys is still hiring thousands of new employees in India every year. The mood is upbeat. Nasscom is forecasting 25% annual growth in the Indian IT services industry for the next few years. The golden goose is still laying large, warm eggs, enough to feed the 4 million and their families, servants, chauffeurs and cooks.
Meanwhile, the workforce is getting comfortable in their cubicle chairs, just as the turkey gets comfortable before Thanksgiving.
Forbes recently published some scary statistics on wage inflation in India. Salaries rose 15.1% in 2007, up from 14.4% the previous year. The 2008 forecast: 15.2%. This would be the fifth consecutive year of salary growth above 10%.
Add to that the appreciation of the rupee against the weakening dollar, and its impact on the labor arbitrage market.
Is the death of Indian outsourcing all that far off?
Assuming a 15% year-to-year salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, if US wages remain constant, India's cost advantage disappears by 2015. Then what?
Slideshow: Aceing an outsourced job interview
Harbhajan cleared of monkey business
India off-spinner Harbhajan Singh [Images] was cleared of any wrongdoing during the first final of the CB Tri-series against Australia in Sydeny on Sunday.
ICC [Images] Match Referee Jeff Crowe ruled out action against the bowler, who is alleged to have made monkey gestures towards crowd at the SCG.
'Harbhajan did nothing'
Australian media had reported that Harbhajan made monkey gestures towards the Sydney crowd during the match, which India won by six wickets, and even spat in anger while fielding at the boundary ropes.
"I have investigated the alleged incident with Cricket Australia's ground security officials after reading newspaper reports and viewing related photographs that have been published.
After reviewing all available information, I conclude that there is no need to take any action against Harbhajan Singh," Crowe said in a statement, issued by the International Cricket Council.
Local media reported that Harbhajan apparently motioned as if to scratch his armpits with both hands in the same manner fans did to taunt Andrew Symonds [Images] in the one-day series in India last year.
The Sydney Morning Herald claimed to have a picture of Harbhajan making the gesture.
Harbhajan, who was involved in a racism row with Australian all-rounder Andrew Symonds, rubbished the allegations and said no evidence could be produced to prove him guilty.
When The Indian spinner was informed that the official broadcaster, Channel 9, might not have any incriminating evidence to offer to the Match Referee to nail him down, the Indian spinner was not surprised.
"Obviously, they wouldn't have anything because I didn't do anything," said Harbhajan on arriving in Brisbane, looking to build on his fabulous performance on Sunday with a series-sealing triumph at the Gabba.
Harbhajan said he was stumped at the accusation that he was trying to make monkey gestures towards the crowd.
"Some of the verbal attack which the crowd was directing at me was despicable. It crossed all limits of decency. But my word, as a professional cricketer, my entire focus was ensuring that we as a team did well in the match."
Harbhajan was also accused of spitting time and again apparently to taunt the hostile crowd.
"When you have saliva in your mouth what do you do?" asked Harbhajan, barely able to hide his irritation.
One of the regulations of the ICC and Cricket Australia is to ensure that crowd at a stadium does not make any racial slur or abusive gesture towards cricketers on the field and those found guilty of doing so, are to be evacuated immediately -- worse, they could even be banned from attending matches in those stadiums in future.
Clearly, this was not the case at the SCG on Sunday night while this supposed "exchanges" were taking place between the crowd and Harbhajan.
"Probably it wasn't possible -- or else the security would've had to clear the entire stadium," said Harbhajan laughingly.
He, however, found support from legendary Australia captain Allan Border [Images], who praised the bowler for his behaviour after he was baited by the SCG crowd.
"I was over that side of the ground and Harbhajan was copping a fair bit of stick from the crowd," Border said.
"I didn't notice any gestures at all and I thought he handled himself pretty well. It's not a big deal," he was quoted as saying by the Herald Sun.
ICC [Images] Match Referee Jeff Crowe ruled out action against the bowler, who is alleged to have made monkey gestures towards crowd at the SCG.
'Harbhajan did nothing'
Australian media had reported that Harbhajan made monkey gestures towards the Sydney crowd during the match, which India won by six wickets, and even spat in anger while fielding at the boundary ropes.
"I have investigated the alleged incident with Cricket Australia's ground security officials after reading newspaper reports and viewing related photographs that have been published.
After reviewing all available information, I conclude that there is no need to take any action against Harbhajan Singh," Crowe said in a statement, issued by the International Cricket Council.
Local media reported that Harbhajan apparently motioned as if to scratch his armpits with both hands in the same manner fans did to taunt Andrew Symonds [Images] in the one-day series in India last year.
The Sydney Morning Herald claimed to have a picture of Harbhajan making the gesture.
Harbhajan, who was involved in a racism row with Australian all-rounder Andrew Symonds, rubbished the allegations and said no evidence could be produced to prove him guilty.
When The Indian spinner was informed that the official broadcaster, Channel 9, might not have any incriminating evidence to offer to the Match Referee to nail him down, the Indian spinner was not surprised.
"Obviously, they wouldn't have anything because I didn't do anything," said Harbhajan on arriving in Brisbane, looking to build on his fabulous performance on Sunday with a series-sealing triumph at the Gabba.
Harbhajan said he was stumped at the accusation that he was trying to make monkey gestures towards the crowd.
"Some of the verbal attack which the crowd was directing at me was despicable. It crossed all limits of decency. But my word, as a professional cricketer, my entire focus was ensuring that we as a team did well in the match."
Harbhajan was also accused of spitting time and again apparently to taunt the hostile crowd.
"When you have saliva in your mouth what do you do?" asked Harbhajan, barely able to hide his irritation.
One of the regulations of the ICC and Cricket Australia is to ensure that crowd at a stadium does not make any racial slur or abusive gesture towards cricketers on the field and those found guilty of doing so, are to be evacuated immediately -- worse, they could even be banned from attending matches in those stadiums in future.
Clearly, this was not the case at the SCG on Sunday night while this supposed "exchanges" were taking place between the crowd and Harbhajan.
"Probably it wasn't possible -- or else the security would've had to clear the entire stadium," said Harbhajan laughingly.
He, however, found support from legendary Australia captain Allan Border [Images], who praised the bowler for his behaviour after he was baited by the SCG crowd.
"I was over that side of the ground and Harbhajan was copping a fair bit of stick from the crowd," Border said.
"I didn't notice any gestures at all and I thought he handled himself pretty well. It's not a big deal," he was quoted as saying by the Herald Sun.
India sends strong message to US on N-deal
India on Monday made it clear that its rights and obligations regarding civil nuclear cooperation came only from the bilateral 123 Agreement and not from the controversial Hyde Act.
"The Hyde Act is an enabling provision that is between the executive and the legislative organs of the US government," External Affairs Minister Pranab Mukherjee said in a suo motu statement on foreign policy-related developments in the Lok Sabha.
"India's rights and obligations regarding civil nuclear cooperation with the US arise only from the bilateral 123 Agreement that we have agreed upon with the US," he said.
The minister referred to some statements by US officials regarding the applicability of the Hyde Act to the nuclear deal but did not elaborate.
US Secretary of State Condoleezza Rice had said last month that the Bush Administration will 'support nothing with India in the Nuclear Suppliers' Group that is in contradiction to the Hyde Act'.
New Delhi has held that the Hyde Act contains prescriptive clauses that includes cessation of all civilian nuclear cooperation in case India tests a nuclear weapon and also restricts reprocessing of spent fuel.
Rice had emphasised that changes in the NSG guidelines, required by India to open up international nuclear commerce, will have to be 'completely consistent with the obligations of the Hyde Act'.
To drive home the point, the US Secretary of State had said: 'we will have to be consistent with the Hyde Act or I don't believe we can count on the Congress to make the next step.'
Mukherjee said, India was currently engaged in negotiations with the International Atomic Energy Agency to arrive at an agreed text of an India-specific Safeguards Agreement.
The conclusion of such an agreement would enable the 45-member NSG to amend its guidelines for civil nuclear commerce in favour of India, he said.
"This will open the door to civil nuclear cooperation with various countries, including Russia [Images], USA, France [Images], UK etc with many of whom the necessary enabling bilateral agreements for such trade have been discussed and are in various stages of finalization," Mukherjee said.
This development would signify, finally, an end to unfair technology denial regimes and sanctions that India has been faced with for over three decades.
"The Hyde Act is an enabling provision that is between the executive and the legislative organs of the US government," External Affairs Minister Pranab Mukherjee said in a suo motu statement on foreign policy-related developments in the Lok Sabha.
"India's rights and obligations regarding civil nuclear cooperation with the US arise only from the bilateral 123 Agreement that we have agreed upon with the US," he said.
The minister referred to some statements by US officials regarding the applicability of the Hyde Act to the nuclear deal but did not elaborate.
US Secretary of State Condoleezza Rice had said last month that the Bush Administration will 'support nothing with India in the Nuclear Suppliers' Group that is in contradiction to the Hyde Act'.
New Delhi has held that the Hyde Act contains prescriptive clauses that includes cessation of all civilian nuclear cooperation in case India tests a nuclear weapon and also restricts reprocessing of spent fuel.
Rice had emphasised that changes in the NSG guidelines, required by India to open up international nuclear commerce, will have to be 'completely consistent with the obligations of the Hyde Act'.
To drive home the point, the US Secretary of State had said: 'we will have to be consistent with the Hyde Act or I don't believe we can count on the Congress to make the next step.'
Mukherjee said, India was currently engaged in negotiations with the International Atomic Energy Agency to arrive at an agreed text of an India-specific Safeguards Agreement.
The conclusion of such an agreement would enable the 45-member NSG to amend its guidelines for civil nuclear commerce in favour of India, he said.
"This will open the door to civil nuclear cooperation with various countries, including Russia [Images], USA, France [Images], UK etc with many of whom the necessary enabling bilateral agreements for such trade have been discussed and are in various stages of finalization," Mukherjee said.
This development would signify, finally, an end to unfair technology denial regimes and sanctions that India has been faced with for over three decades.
Subscribe to:
Posts (Atom)