New fears: neighbours, diversity, coalitions

Highlighting this new disturbing data is a study by the Associated Chambers of Commerce and Industry (Assocham) and International Data Corp (IDC). The study, due for release soon, lists some of India’s weaknesses when it comes to attracting certain kinds of investments.

The vulnerabilities include varying ideologies of political parties “in coalition governments at the Centre and states” and proliferation of laws, leading to “increase in corruption”.

The report also says that language, religious and cultural differences have led “to riots like Godhra” and that coalition-era disagreements have led to “situations like that in PSU disinvestment”. In fact, of the usual suspects in the list of complaints against India Inc, only one — infrastructure — finds mention here. For the rest, the report dwells on the need to improve, or at least change, social and political situations.

BTO is an offshoot of the business process outsourcing (BPO) industry that is new to India but has a potential to grow to around $680 billion by 2008, according to industry figures quoted in the report. Overall, the report finds India is at an advantageous position as far as outsourcing is concerned and stresses that India is a country “one cannot afford to ignore”, now that it also has crossed the $5 billion FDI mark.

But also, according to others who were part of the study, called ‘Business Transformation Outsourcing: 3rd Generation Outsourcing’, now is time for India to tackle social issues head on.

Says Raman Roy, founder, Quattro and member of Assocham's Committee on BPO: “Whether you treat cultural differences as a plus-point or a negative depends on your viewpoint but can you or I wipe it (Godhra incident) out? We can’t. This report brings forth certain things that are on the mind of potential customers and we need to tell them how to manage business continuity under these circumstances. Though not show stoppers, these issues need to be tackled.”

One of the many ways in which cultural diversity — and it's frequent negative fallout...