Early in September, the Indian government said it would release 2.5 million tons of rice and wheat to the country's poor over the next six months. It was following orders from India's Supreme Court, which in turn had reacted to television reports that showed stacks of rotting food grain in railway yards.
"Give [the grain] to the hungry poor instead of it going down the drain," the court told the government's counsel. The court also asked the state-owned Food Corp. of India (FCI) to expand and modernize its distribution infrastructure, and noted that 50,000 tons of wheat had already deteriorated. (Only 12,418 tons were damaged, the FCI claimed later.) The case brings renewed focus on the interlinked challenges of feeding India's poor and overhauling its food grain procurement, storage and distribution infrastructure, experts tell India Knowledge@Wharton.
The issue has positioned the Supreme Court on one side and the government on the other. The court was not amused that the government had chosen to interpret an earlier ruling on the issue as a "suggestion" and not an "order." The government felt that the court was exceeding its mandate. Prime Minister Manmohan Singh told a meeting with newspaper editors -- an annual event where the government is traditionally candid about its perceptions -- that he respected the court's "sentiments" and that concessional food should be made available to the poor. However, he suggested that courts should not get into the "realm of policy formulation."
"Inspired by the sight of food grain going to waste, it is often made out to be that our central problem is that of poor food grain storage," noted Kaushik Basu, chief economic advisor to India's finance ministry. In a paper titled, "The Economics of Foodgrain Management in India," published this month, he disagrees with that assessment:
"We have to design the entire food grains policy skillfully in order to ensure that we can fulfill the right to food that we are about to confer on our citizens, and at the same time ensure that our fiscal system is able to withstand the expenditure."
The Supreme Court took umbrage at the response of agriculture minister Sharad Pawar, who had initially said the government was unable to distribute food grain for free as transportation costs were high. In addition, it was already providing generous food subsidies. The number of legal outsourcing companies in India has mushroomed to more than 140 at the end of 2009, from 40 in 2005, according to Valuenotes, a consulting firm in Pune, India.
Revenue at India’s legal outsourcing firms is expected to grow to $440 million this year, up 38 percent from 2008, and should surpass $1 billion by 2014, Valuenotes estimates.
“This is not a blip, this is a big historical movement,” said David B. Wilkins, director of Harvard Law School’s program on the legal profession. “There is an increasing pressure by clients to reduce costs and increase efficiency,” he added, and with companies already familiar with outsourcing tasks like information technology work to India, legal services is a natural next step.
So far, the number of Western lawyers moving to outsourcing companies could be called more of a trickle than a flood, but that may change, as more business flows out of traditional law firms and into India.
Compensation for top managers at legal outsourcing firms is competitive with salaries at midsize law firms outside of major metropolitan areas of the United States, executives in the industry say.
Living costs are much lower in India, and often, there is the added allure of stock in the outsourcing company.
Comment
Clearly, the Indian authorities are making it very attractive for US lawyers to settle in India but this is a tactic that has worked for them before.
The question is, how soon will the tide turn in the other direction? Is this the first step in bulding a more competitive India law capability that can directly address the US and othe European markets?
US or Europe?
The feeling is that the US is most at risk from this venture because it has a reputation for being a more litigious society, and this has already established a huge market and an enormous opportunity for price competitive outsourcing.
Europe is a more difficult and specialist market with each country having it's own legal system and language preference. A lot of work and study needs to be done to capture a relatively small piece of the larger market.
To read the full article click here
In a complete reversal of the normal outsourcing policy for some years now, BT has decided to relocate 2,000 call centre jobs, currently held in India to the UK. Interruptions to business customers have upset the sense of security that made Indian offshore outsourcing an uncomplicated buying decision. Companies are putting on hold the offshore projects that were routine just a year ago, puting more effort into investigating and analysing alternatives that help mitigate unresolved risks.
Promising locations like South Africa, Columbia, Malaysia, Thailand and Mexico have done little in terms of government initiatives or social change to allay client fears about their safety, as an outsourcing destination. Some countries with more established IT export businesses e.g. the Philippines and Brazil, have progressed slower than expected.
India's "tier II" cities, once poised to take business away from the cities like Bangalore, do not have the infrastructure and social improvements necessary to compete. India's track record does not bode well for fast development. This making other locations such as Latin America and central and eastern Europe more appealing to corporate organisations.
A number of emerging offshore locations have made great strides in mitigating risks inherent to their countries, while still keeping their costs and overheads low, e.g. Poland, the Czech Republic, Chile, Egypt, etc.
The risk factors involved in offshore outsourcing e.g. terrorism, potential war, disaster, network breaks, environmental disregards, crime and epidemic disease, make contingency plans a greater necessity. The emerging trend currently, is for IT outsourcing customers to seek out solutions closer to home, nearer their own shores or in the same country, where potential problems can be more readily understood, predicted and better managed.
Rankings based on mean scores in ten areas of risk as reported by The Brown-Wilson Group's "2009: The Year of Outsourcing Dangerously"
Corruption & Organized Crime
Heightening Trans-national & Geopolitical Issues
Unsecured or Unprotected Networks and Infrastructure
Unstable Currency
Personal Crime Rate/Police-to-Citizen Ratio
Environmental Waste & Pollution
High Terrorism/Insurrection Threat
Legal System Immaturity
Weather/Climate Threats
Posts
All Comments
