The rise in the rate of economy of India and china and implications for British Businesses
... Revolution that aims to double the average income of the Indian farmer by 2010 is currently underway in the country and has already resulted in, Buffer stock of food grains of nearly 50 million tonnes , Increased share of total exports to nearly 14.2 % ,Second largest exports of rice and Introduction of future trading in edible oil and foodgrains. Overall agricultural production is expected to grow by 14% in 2003-2004. Manufacturing grew by 7.2 percent, improving on its 2002-03 figure at 6.7 percent. Contributing close to a fourth of the GDP India's manufacturing sector has a diversified base of world class capabilities that uses state-of-the-art technologies. Industry growth rose to 6.2% during April - November 2003 compared to 5.4% during the same period in the previous year.An Infrastructure and Manufacturing Fund will be set up by March 1, 2004 to provide an aggregate additional investment of Rs.50,000 crore over the next 3 years in infrastructure and manufacturing projects like power generation, sea ports, air ports,roads, tourism, telecommunication and urban infrastructure Services are growing consistently at a rate of 7% per annum. The service sector currently account for almost half of India's GDP.The resilience of the Indian economy in the face of a global recession can be attributed to the strong performance by the service sector. In 50 years, only one crore and eighty six-lakh telephone connections were sanctioned. In the past five years alone, over three crore telephone connectons have been provided. The number of mobile phones has crossed the two crore mark from 12 lakh in 1999. The sector records a growth of 9.6% over July-September 2003. Other sectors such as electricity, gas and water supply grew over 5%, construction rose by 6.2% , trade, hotels, transport, real estate and business services grew by 6.8%,while community, social and personnel services saw a 6% growth. India is not merely a provider of services. Besides a global manufacturing hub, it has grown into an outsourcing hub provinding implications for British businesses.An estimated 40 lakh new jobs are likely to be created in India in the next couple of years as a number of foreign firms are set to shift their back-office jobs to the IT-dominated country, which is poised to be the world's next trillion-dollar economy after China. Companies seeking to cut costs and improve services are outsourcing back-office processes, call centres and IT to India where unemployment is up to three times the level of the UK.During the past 18 months, UK-based Standard Chartered Bank has gradually transferred its back office to Chennai. The move has involved shifting 23 processing units from 35 countries. Despite the ongoing backlash against offshore outsourcing, British companies keen to cut costs are continuing to outsource jobs to low-cost locations like India. Latest to join the bandwagon are banking major Abbey and insurance giant AXA. The French-owned AXA said 220 jobs would be axed at its general insurances sites in Morecambe and Darlington and 250 other posts would be implicated off-shores at other offices in India. From October 2004,Abbey's current account inquiries were handled by the firm's new call centre in Bangalore, which opened last year. Abbey National Group Union said the transfer of jobs abroad is wrong for employees, customers and Britain. The British banking major, Lloyds TSB plans to transfer about 1,000 more British jobs to, Bangalore and Mumbai in India by 2005-end. The move will result in some of the British staffers' jobs being replaced by those created in India, but the bank said that workers in the United Kingdom will not lose their jobs and be redeployed elsewhere in the group. However , Implication in India proves to be cost effective and results in great saving for a firm. A few workers unions have protested the move saying, that this is first step towards export of more jobs. Even though India continues to be the hottest outsourcing destination, growing challenge from China is slowing eating into the offshoring pie. India had it too good for a long time, as it was the first country to carry out successful offshore projects. But now, India ha...