US Budget 2013 and Its Impact on Outsourcing Companies in India

US Budget 2013

In the month of March, Senate members reviewed and confirmed that the U.S. federal budget deficit jumped in February from January. Higher taxes and improving economy are expected to hold back the annual deficit below $1 trillion for the first time since President Obama took office.

However, the graph was positive, but the major blow was given by Rep. Paul Ryan‘s proposed budget. What does his budget propose?

  • Ryan, the House Budget Committee chairperson, released his latest fiscal proposal on Tuesday, aims to reduce government spending outside of Social Security and interest on debt to its lowest levels in over six decades – Reported by Investor’s Business Daily.
  • He cuts over $4.6 trillion. The blueprint aims to balance the budget in 10 years by slashing important amenities. If the proposed budget is approved, how will this budget influence the outsourcing and other major offshore industries? – Reported by Investor’s Business Daily.
  • Budget year began on Oct. 1, with a deficit of $494 billion. That’s nearly $87 billion lower than the budget gap for the same period in 2011. Even with this improvement, the government would be required to borrow 24 cents of every dollar this year – Reported by

Questions that may rise globally in the minds of people are:

  • Is Ryan of the opinion to stop the excess expenditure through this proposed budget?
  • Is that the reason he is proposing a budget that goes against the poor Americans?
  • What will be the state of jobs in America? Since, Ryan’s budget proposal is going to kill millions of jobs.
  • In the midst of all this chaos, how latent topic of outsourcing will be benefited?

We will look at the US budget and its impact in Indian outsourcing industry in 2013.

US Budget Vs. Outsourcing in India

Last year the political duel between Mitt Romney and Obama had a serious impact on the outsourcing business. Romney in favor of escalate the outsourcing business just slipped the political game, whereas Obama was interested to slash down the outsourcing level, won back his office. However, after Obama took the office and the recent escalation of the US economy is suddenly changing the notion of America towards outsourcing.

Indian outsourcing industry, which faced a stiff competition in the year 2012, gears up to make 2013 bigger and profitable. India is eagerly looking at the facts where a large amount of money will start flowing to the outsourcing industry in India.

Most of the outsourcing companies in India are on the verge of renewing their contracts that were linked ten years back. Economist estimate that the amount will be somewhere around $50 billion – more than half of the total Indian outsourcing industry. This claim, that 2013 will be a busy year for the Indian offshore outsourcing providers like Fusion CX and other leading brands.

The owners must grab the opportunity at any cost to revitalize their business. They must sharpen the strategic weapons to gain an edge over their competitors. Companies are leaving the techniques that have ruled the outsourcing industry for decades. Rather they are thinking to restructure the offshore outsourcing models. They are going on experimenting with new methods that are not only going to focus on the cost-reduction, but improve the quality, control and communication efficacy.

The same trend is likely to be seen in the small and medium sized business as they are going to unleash their spree of innovations to give more personalized and cost-effective offshore outsourcing solutions. Building their own offshore contact centers is the most common strategy adopted by the big MNCs. This helps them to get skillful human resource, control over different aspects of business and cost-efficiency as compared to onsite development centers.

How US Budget Is Changing Outsourcing Outlook In India?

In spite of Ryan’s brutal stab, bringing back the offshore manufacturing this year will be the main aim for major brands. Just bringing back the jobs is not the aim and it is not going to work for a global economy, India is trying for something sustainable.

  • Indian contact centers are equipping people with trends ahead of time and re-equipping them to work with new conditions effectively.
  • Traditional model can support the business with cost advantage but the major downside is its inefficiency. To repair and cope up with the standards of Indian outsourcing, they are going under a complete makeover.
  • A new generation offshore outsourcing companies in India are aiming to imbibe the factor ‘My Own’ flavor to their offshore structure. They have shifted their focus to the global staffing model instead of global contacting model. This will ensure 100% control in employee management, recruitment and project development.
  • Another major aspect that they contribute is the highest degree of transparency to build rapport between offshore vendors and clients. Costs associated with this model are different from the traditional models.

Therefore, in the coming days it is expected that the new model of outsourcing will play a pivotal role in India.

Working against the globalization and technology is futile if we have to keep at par with Ryan’s proposed budget. Therefore, it’s time to keep fingers crossed and hopes high for the Indian outsourcing industry.

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