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Economic Growth: India on the Fast Track

The introduction of reforms, globalization and information technology has led to phenomenal development in India's political, social and economic infrastructure. The economic growth is no-longer inert and outmoded; on the contrary it is resurgent and progressive. The country's economic growth is in the pivot of an ever-increasing growth curve and it grew by an impressive 9.2 percent during the second quarter (Q2) of 2006-07 (July to September).
Today, Indian economy is one of the fastest growing economies of the world and it is predicted that by 2020, it would be amongst the top four world economies. With continued reforms and the shackles on the Indian economy breaking this could well be India's 'decade of development'.

The liberalization of the Indian Telecom sector in 1994 has resulted in the unparalleled growth in the Information Technology sector. The Information Technology (IT) sector comprising of IT-enabled services (ITES) / Business Process Outsourcing (BPO) are the core sectors that have been driving the higher growths in the Indian economy. Dubbed as the "sunshine industry of India" the BPO industry has been growing at a sizzling pace of 60-70 percent annually and is now worth $12 billion, employing 400,000 people. In addition, an estimated 100,000 new jobs are being created every year by the BPO industry. This apart, it has generated about 3 million jobs indirectly in the transportation and catering industry. Many consider the BPO industry as a magic wand that will ward off unemployment for thousands of young graduates in India.

Offshore outsourcing to India provides considerable economic advantages like cost savings of 40-60 percent, quality improvement of 3-8 percent and productivity improvement of 15-20 percent. Today, India has emerged as one of the most coveted and accepted destinations for business process outsourcing and has to its credit a host of Fortune 500 companies that have either set up their BPO units or tied up with the other third-party outsourcing companies. Undeniably, BPO has put India on the world map as a force to reckon within the post-globalization world.

BPO Industry: India's Money-Spinning Sector

The early 1990s saw a surge in the services sector of India economy. In 1994, Raman Roy, widely considered as the pioneer and "guru" of the BPO industry in India, set up the first back office operations for American Express and General Electric Co. Since then, a huge amount of back office work has being outsourced to India. What started just as a niche service provision has today evolved in to a whole new industry in itself.

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* Contributed by: -
M. S. Balaji & Diganta C.,
Research Scholars,
ICFAI Insititute for Management Teachers, Hyderabad.