Who would have thought that a pandemic of such a large magnitude could throw up such an easy solution to a problem that put Indian IT industry in a dire state for so long. But yes, that’s true! Out of sheer desperation, a way has been found, which could not just potentially solve a grave issue for the industry but could result in enormous cost cuttings as well!
Market tanked as profit booking set in after two days of abrupt run. The euphoria in the market was largely due to the positive global cues. As world economies started to get out of the lockdown, India has also significantly relaxed its lockdown norms and the government has shifted its focus on economic revival.
Market fell off the high as Sensex closed 0.37% higher at 30.932.90 while Nifty gained 0.44% to close above 9,100. ITC (up 7.51%), Hindalco (up 7.20%) and Asian Paints (up 4.95%) were the major gainers while Bajaj Finserv (down3.46%), IndusInd Bank (down 2.94%) and NTPC (down 2.85%) were the major losers of the day.
Work from Home: Simple solution to a grave issue
Inarguably, the culture of work from home has emerged as one of the by-products of Covid-19. IT companies were the first to adapt to it and now, this trend is even seen as a potential solution to the industry's H1-B related issues.
To give a little historical perspective, the issue of H1-B Visa has caused constant pain to Indian IT companies in recent history, especially for those operating in the US market. Trump administration, stressing on local employment, has been constantly threatening to reduce the number of H1-B visas issued to Indians, forcing IT companies to open local campuses and hire local youth, increasing their cost significantly.
Elaborating on this topic, TCS has hinted that WFH could be a potential answer to H1-B threat. In its annual report of FY20, TCS said that as meetings and training have moved virtual, the traditional divide between onsite and offshore has completely blurred. Cashing on this trend, IT companies could reduce its visa dependency by cutting the onshore visits of its employees.
With simple economics, FM hit critics out of the park
The government faced severe criticism for the lack of demand-side measures in its stimulus package. While courageous reforms and plenty of liquidity boosting measures were brought in, critics went on ranting about lack of cash support in the form of GST cut, tax relief or the direct cash transfer.
Sitharaman, in her recent interview, said that the government heard all the arguments in support of putting direct money in the hands of people but the government chose to provide liquidity to companies as it will have a cascading effect, eventually resulting in more people benefitting.
Using simple economic principles, she underlined that the revival of industrial activities would lead to higher raw material consumption and utilization of electricity, which is automatically a demand boosting measure.
She further stressed that direct money transfer is not the only way to help the poor. Increased factory production and let the workers earn their wages could also be a way to put money in their hands.
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