Retired bank employees, school teachers, insurance agents and clerks who worked half their life to get a Bajaj Chetak scooter and the rest half of their life to maintain it; self-drive their Hyundais and Fords today to walk in the shores of marina or Besant Nagar at dawn or dusk discussing about Calories, the distance between Seattle and Chicago and exchange rates.
On the other hand, there are middle class, lower middle class and poor people who claim that IT has taken away the happiness from their lives and increased their cost of living by 'n' folds. Movies like Tamizh M.A a.k.a Kattradhu Tamizh (thanks to the government's taxation policy!) protest against the whole trend claiming that the growth reported by IT is more like a tumor than a development. Some others even claim that folks in IT get overpaid for nothing.
So what's really happening? Is IT a boon or a bane?
If I'm asked to be point blank, IT is definitely a boon to the Indian economy. So am I rejecting the fact that folks who mastered sociology, physiology, history, geography and English should suffer? Absolutely not! First of all, with all due respect, I hate the concept that the movie Tamizh M.A backs! If someone earns more than what I do, they should suffer and I'd protest against them and their growth calling it as Capitalist mentality. This concept (hint: code red :)) which has somehow identified itself to be a principle is actually destroying the society.
Salaries and earnings have always been driven by two basic principles - 1. how much does the employer make 2. does the work really need you or any Tom, Dick or Harry can replace you... IT companies make billions and billions of US dollars every year and IT does require specialized skill set to get the job done. So naturally they will be paid higher than an English, physiology or a sociology graduate. Second point - is IT the only sector where wages have raised? A maid who cleans dishes and brooms the floor would've got 200 or 300 rupees before 10 years. Today, the to get the same job done, one needs to pay at least 1000 even in the suburbs! If IT is proclaimed to be the only reason for the drift in economy and inflation rate, then this credit automatically has to go to IT. Another point worth mentioning here is that IT is not just employing Software Engineers. Security agents, real estate brokers, land owners, house owners, transportation agencies, house-keeping staff, banks, courier agencies, mobile phone companies, gift shop owners and a flurry of non-IT people and professions are also benefited by IT. In short, IT increases the buyer's potential and makes money flow just like it's portrayed in a high school English lesson where a lunatic comes into a town and revolutionizes the economy of the place by ordering a Rolls Royce!
In short millions and millions survive on this industry and so many middle class hopes have come true in the form of basic facilities, own houses, cars, bank balance, credit cards, jewels and liquid cash. Let's be happy and feel proud about the growth of fellow Indians instead of frowning at it. Everything else would fall in place on its own!
12 comments:
Nice post buddy. An interesting point of view.
Thanks maapla!
An interesting, polemical topic to start with...nice articulation...
my point of view is a bit different though not completely antithetical to yours...how much does the total IT revenues contribute to Indian economy?...around 7% last year...how much is the total population of people who are working in IT & ITES and their families?, definitely meagre...though I should accept the fact that there are so many other sectors which are getting benefited bcos of IT, again the population will be very smaller...if that is the case, why all the blame is going to IT?...because whatever we get is conspicuously visible to everyone...where as no one knows how much a doctor, school teacher or a grocery shop owner earns every month...a note from tax department says that a person who is running a beeda shop infront of a famous restaurant in Mumbai puts 30K everymonth in FD...
ur first reason for corroborating the high salary of IT employees is not complete...not only does the IT industry make profits, so do the other companies...but the percentage of profit they share with their employees differ in a bigger way...for ex, an Indian IT company in average spends 40-50% of its total earnings for employees...where as, if u take private firms from other sectors, they spend only a very less part of their earnings though their profits are still better than IT companies (there are companies which grow in multifolds every year)...so, its the job of other sector employees to protest and get what they deserve rather than blaming ITians...
growing economy and inflation cannot completely be attributed to IT...ITians earn and spend only in Tier 1 and in some Tier 2 cities...still majority of Indian population comes from villages (of course not referring to the 1950 census)...so, it is the huge demand from people which drives the inflation...economy is growing as India's local demand is increasing like never before (people are spending like never before :) )...again, 'the man who saved Pumblesdrop' is not a perfect exmaple to refer to what IT industry is doing as I am pretty confident that even without the emergence of IT, India would have got the same amount of growth...so, what will happen if all the developed nations stop outsourcing to India?...in my point of view it would be better to provide better services to the citizens of India as application of technology to various sectors is still pending in India and this is the right time...so, in my opinioin, IT is one of the factors behind the economic growth and not the major factor...
ur comments are welcome...
Thanks for the detailed comments maapla! But let me put in a few things where I differ from your opinion:
1. Despite the percentages that you mention on IT's contribution to Indian economy, you couldn't refuse that IT revenues are steadily picking up and it might even have doubled this year. Further when you take the revenue of the whole nation, that includes Electricity, water supply, railways and other departments that contribute in huge volumes and become basic necessities. So IT cannot be compared to those sectors. Further just as an example at least 30% of people traveling from Chennai/Bangalore down south (every week) are IT folks. So indirectly IT contributes in a lot of ways to these departments too.
2. Never say IT shares a lot of profit to its employees. If o you and I would be millionaires by now! :)) Other industries do make huge profits but they spend a lot on the infrastrucure and the machinery. End of the day, most IT companies perform way better than the rest. Show me one industry that operates on a min 55% profit margin except IT! If the profitability sheets hit 55% the managers panic whereas in other industries 55% profit is like a boon from the Almighty!
3. People spend more because they earn more. Typical Indian mind is to save as much as they can for the future! And if you are able to see so much liquidation of money, it's because a vast majority of the young/middle-aged population is in high paid IT jobs. We don't have the same trend for example in Madurai or other cities where IT is yet to come up. Whereas even in Madurai the real estate brokers are minting money just based on a rumor/assumption that IT would soon focus on that city! So I could say eyes-shut that this is like the man who saved pumplesdrop!
As I told, even if it grows at a rapid pace, still it is lesser than 10% of Indian economy...even if take into account the people who are indirectly getting benefitted because of IT as you have mentioned, it might not cross 20% which is still 1/5th of whole economy...just like how mechanical revolution changed the world during 80s, now it is IT...
I never said IT companies are sharing their profits fairly...I cannot say like that as an employee of TCS :P...I just said they are sharing more than some other sectors :)...skilled workers are there everywhere...its not like IT is the only skilled job...actually IT salaries should be looked from a +ve perspective to increase the salaries in other sectors as well to pump in more money into the economy...but looking at how US & UK economies are, we might have to face a tough time in near future...
IT is definitely a curse to the Indian society.There was an inequality in the lifestyle of the people before but it was very little and not as evident as it is today.
IT has played a vital role in growing other sectors - no second thought on that, but how many percentage of population got benefited from it? Even IT professionals are finding it difficult to get a 2 bedroom apt in chennai and blore. The fact is there are other sectors esp. Real estate brokers who are really getting benefited in the name of IT.
Things are getting worse now. With the assumption that IT companies are going to be started in Tier 2 cities the land prices are sky rocketing. Just think how a govt employee who is going to be retired in another 2 years wants to get a home to live for the rest of his life would feel? Should he live in a rented apt through out the life? Are the price of rent marginal? He has to live in the outskirts to get a cheaper house. With people moving to the outskirts of the city the prices have gone up there also. In another few years people will struggle to get a land even in chengalpat and far beyond that.The days are not too far for that.
Yogesh - it is not that ppl are getting jealous of IT guys as projected in the movie Tamil MA (one of the worst movie of 2007). Ppl really bother when it affects their life. They bother when they are asked to pay 6,000rs rent instead of 2,000rs.
They bother when the cost of biriyani they eat once in a month is raised to 70rs from 35 rs. They do bother when they are asked to pay more but with the same amount of income.
Something is called a boon only if it benefits all the people - Not just a portion of the country. Pls do not give me GDP statistics saying that our country has improved after the arrival of IT. Those are quantitative details. Think of the pains of those poor people suffer from the hands of land owners and the rising cost of living mainly bcz of IT.
@SLN
Maaps... I never said IT should be viewed from a -ve perspective. In fact that was the intention of my post - do not view IT as you view cancer! The point where I differ is IT companies are able to pay high only because the profit margins are outrageous. There are so many jobs that involve skilled labor but not as many get profits even close to IT.
@Venkatesh
When you say IT companies are pushing people to the outskirts of the city and that people are not able to survive with the income that they are getting, it is a question of low income in other sectors than the high income in IT. You accept that there are so many other fields that get benefited from IT and that means the nett revenue of those families would also have gone up proportionately. Let me answer the question that you asked. A Govt employee who is going to retire in 2 yrs wants to get a house. Should he not have that basic wish? Fine! Good question... Now I have 2 questions. How many urban fathers allow their sons to take up anything other than IT, Medicine and other high profile jobs? Every person in the cities and metros now is highly calculative and they don't just plan their future but also their son's/daughter's future along with that. And second, why is a retired person so particular about 'owning' a place in the center of the city? Isn't it a well known fact that areas that are outskirts today become hubs tomorrow? Growth cannot start at every corner dude! There has to be a starting point and when you are not able to cope up with the pace, you better stay away until the growth comes to you. But frowning at (this is different from being jealous) the growth is never a solution or a stepping stone in my opinion. IT is the starting point for our growth and if every other area follows suit, we can soon improve the standards, the value for a rupee and control inflation.
Machan
1.how many portion of population is getting benefited from IT. Very meager. In fact they are really exploiting the IT people. Do not just think of the upper middle class who has their children working in US and UK. Try to have a broder view on the entrire sect of population. I do know a guy who was washing tea glasses in a tea shop but his son studied well and was able to get into one of the MNC which has changed the life of them. Call it their planning, gift, luck or hard work. But not all people are really gifted like this.
2. Do you want people to stay 30 kms from the city to give cheaper rents? What about the commutation and other problems? The real estate brokers have not spared even the outskirts of the city.
3. If everyone plans and gets into IT what will happen to the growth of sectors? Think of the Demand- Supply chain.
4. Yes growth has to start somewhere. But this is not growth. The cost of most of the basic things are rising in multiplefolds. The price hike is called growth? People working in Banks, Govt offices like post office, bus drivers ,conductors and thousands of other sectors independent of IT cannot lead a normal life with this price rice. I am not blaming IT completely but it is the exploitation of IT industry/ppl by few other sectors. They cannot stand and watch this like a movie as it is affecting their lives dear. Moreover if the trend continues they will be left apart in this rally and as thalaivar says "Poor will go further poorer".
5. As an Indian i bother about my fellow Indians who are left alone in this growth and not able to grow with us.
Solutions:
- Govt should take measures to control the price hike.
- Motivate end encourage other sectors and raise their salary.
Ok... So now we start discussing about a person cleaning glasses in a tea-stall from a Govt employee who wanted to get a house after retirement.
If you want a single line answer - "World is all about the survival of the fittest"! World keeps changing and it brings in new dimensions and perspectives. Today it is IT that can help you make money. If you are competent enough, you are in or else you are out. I don't mean to call other persons dumb or that they are unfit to live. My point is that, when someone can't adapt to a change due to one reason or the other, then he/she needs to adjust on something else. If that means staying in the outskirts then it is. If you are totally sucked up by the life, settle down in second tier cities. Life surely isn't as bad there. You can make some money, commute comfortably and live your life happily. But none wants that. I'd keep doing what I'm currently doing and the world should come to me, spread a red carpet in front of me and treat me like a king! What kind of attitude is that?
I agree with your recommendations but not with your substantiation.
I never said a tea glass washer wants to get a home after retirement.The statement itself looks funny dude. All i am trying to say is how IT affects the quality of ones normal life.
If you are talking about the survival of the fittest why are bothering about society and writing a topic on impact of IT on society?
Anyways everyone has got their own principles and views. Neither of us are going to change our view just by a discussion on this blog.
Keep blogging dude.
Thank God... You didn't mean that a poor laborer should dream about getting a new home in the heart of the city.
Survival of the Fittest has been there ever since more than one species originated and even till date it is continuing. When I quote that principle in this context, I'm not trying to deny the right of living to anyone and neither am I immune to the difficulties of the poor. All I'm trying to say is when one sector brings in a lot of revenue, employment and improvement to the urban mass; either you should join the wave or accept that you have to stay in second tier cities or they need to spend/earn more to live the same life! That's all... But eventually when the scales balance out, the value for rupee will increase and ultimately we'll have a reduced inflation rate which I tend to correlate to 'Growth'!
Your blog is very nice... i like your blog ....
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