The government today said that the financial meltdown in the US has had an impact on many sectors including IT and BPO, industries which are highly dependent on US companies.

The minister of state for communications and information technology, Jyotiraditya M Scindia, told the Rajya Sabha that as the meltdown was a global phenomenon, there were only a limited amount of measures that individual companies could take. These include an increased focus on productivity, efficiency, and resource utilisation, wage moderation, optimal lateral hiring, etc., and increasing levels of efficiency for utilisation of assets like real estate and IT infrastructure.

Scindhia said the National Association of Software and Service Companies (NASSCOM) suggests that most of the companies are working to increase their levels of utilisation of resources and looking to redeploy personnel within the organisation where possible.

India’s IT and BPO industry has been going through a tough phase, with its growth declining. Some major players have started to concentrate their efforts in European markets to try and cut their dependence on the US.

But Nobel laureate Amartya Sen has offered a grain of hope to the Indian outsourcing industry. In a recent interview with All India Radio, Sen said the recession wouldn’t prove to be a long-term threat to a booming outsourcing sector as it is likely to last only two or three years. Sen added that Indian services are important for the US, although poor growth in the US would clearly slacken the growth rate in India too. Sen added that the democratic system will have a great impact in sustaining India’s growth rate, which has been recorded at nine percent average in recent years.

In a statement, Indian prime minister Dr Manmohan Singh promised that deposits in Indian banks are safe. X

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