Question 4 of 24intermediate⚖️ EvaluateLong Answer5 marks

Do you think outsourcing is good for India? Why are developed countries opposing it?

Correct Answer

Yes, outsourcing is considered good for India as it has transformed the country into a major destination for global outsourcing in the post-reform period. Services such as accountancy, banking, music recording, and clinical advice are being outsourced by companies from developed nations to India.

The primary reason for this benefit is that services in India can be availed at a cheaper cost while maintaining a reasonable degree of skill and accuracy. The availability of skilled manpower and low wage rates gives India a distinct competitive advantage, making it a preferred destination for multinational corporations.

Technological infrastructure supports this growth effectively. With the help of modern telecommunication links including the Internet, digitised data regarding text, voice, and visuals is transmitted in real time across continents, facilitating seamless service delivery.

Developed countries oppose outsourcing because it negatively impacts their domestic workforce. When companies shift services to India to utilize cheap manpower, it leads to job losses or displacement for people living in the developed countries where these companies are originally located.

Thus, while outsourcing generates employment and utilizes India's skilled workforce, it creates economic concerns regarding employment stability in developed nations.

Exercise: EXERCISES | Q: 10 | (Chapter: Page 18)
For More Understanding

Explanation

The answer is derived from the provided context which highlights India's advantages like skilled manpower and low wage rates. The opposition from developed countries is inferred from the 'Work These Out' section in the context, which prompts a discussion on what happens to people in developed countries when companies outsource—implying job loss.