US will soon realise benefits of outsourcing: PM

Prime Minister said a US proposal to disincentivise companies moving jobs to countries like India could 'hurt the competitiveness' of US corporations themselves.

Prime Minister Manmohan Singh on Saturday said a US proposal to disincentivise companies moving jobs to countries like India could “hurt the competitiveness” of American corporations themselves.

“There are I think several US corporations who have been representing to the Congress of US that these official restrictions on outsourcing from India and other countries would in fact hurt the competitiveness of the US corporations themselves,” he said,replying to a question on US’ proposals on outsourcing,at a press conference here.

Singh also said: “I think governments take certain

postures but they learn very fast” and that he was confident of US realising the “reality” soon.

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“Very fact,the US corporations have access to cheaper facilities in India,also help them in their competition with their rivals… am confident that in not very distant future the US government would recognise this reality,” he said.

Earlier this week,US President Barack Obama had ridiculed the existing tax code that provides for tax breaks to those companies which outsource jobs to Bangalore in India rather than those which create jobs in Buffalo,New York.

The US President had also indicated that the new budget proposal would disincentivise those outsourcing jobs.

This move is expected to impact nearly 10 lakh Indian IT professionals and a sizable chunk of the country’s BPO industry.