Economy India Tech and Culture

The H1-B program brings in mediocre people ?

As expected, the H1-B quota for FY 2007 has filled up in less than 2 months since it started awarding those worker visas. This is a record. Last year, it took until the middle of August for the quota to close. This is going to ignite some major debate within the econo-political ecosystem as more people find out that they cannot hire experts from abroad.

Now, I have to say, some Indians speak the dumbest things possible if they have to make a point. I guess it’s just in our blood. Take the example of IEEE’s VP for Career Activites, Ron Hira. He is definitely not Indian by birth, but has Indian roots. Read what he says in this article in IT World about the H1-B cap.

Under a bill passed by Congress in 2004, the first 20,000 H-1B applications for workers with master’s degrees or higher are exempt from the cap. As of Thursday, the immigration agency had received about 5,800 exempt applications, it said.

With about 14,000 exemption applications still available, that suggests that some companies are looking primarily for cheap labor, Hira said. “That’s at least one indication that there’s not just geniuses coming in,” he said.

Yes, so basically, only the IT workers who have graduated from an American University at any point in their lives are geniuses. This is more disturbing than amusing. I guess what he’s trying to say is that all those workers outside America with decades of experience under their belts are somehow still inferior to that foreigner who just graduated from some shady small league school. Or maybe he is trying to say that recruiting companies are so stupid that they hire low wage foreigners from outside the country when they could essentially do the same from within the country!

I wonder what kind of a salary negotiation power advantage is held by a foreigner graduating from an American university compared to someone graduating from a foreign country. What is stopping an IT company from paying less to the foreigner already here in the US on a different visa? Does IT experience really not count when trying to find a job at a globally competing company?

I guess I am now an elite foreigner simply because I hold not one, but two degrees from an American university. I have a salary edge over other “regular” H1-Bs.

What about people who are “also” qualified but cannot enter the US?

Economy India Politics

My bit on education in India

I just came across this interesting news article on MSNBC that blames textbooks for America’s downtrend in technological and scientific leadership at the global level. The article goes on to say that textbooks in American schools are too thick, archaic, and politically motivated. All sounds good until the article mentions that one of the reasons why India is doing so great in the knowledge and service economy is because of the good textbooks and school systems.

I have studied at Government schools for the most crucial years of my pre-college life. They are nowhere world class, or even good. The textbooks are more often than not, a complete waste of money, and are much more politically influenced than anywhere else. How can you forget the controversies surrounding them that crop up every year or so? In fact, I remember being taught the English language in Hindi!

Indian textbooks, atleast the official Government published ones, are designed basically to provide low cost education. They are really inexpensive. Most students know better and often purchase supplemental books to help them score higher in exams. If I spent Rs. 30 on a government textbook, I would be spending Rs. 300 or more on the supplemental book/guide written by more renowned authors.

I guess a very major difference between “here and there” is that in India, no one expects to be spoon-fed. There is so much competition that everyone is on their toes, perpetually, to figure out ways to outdo the other smart kid in school. At least I didn’t expect to get world class spoon-feeding at my Rs. 45 a month Government school. This is especially true in fields like science and math. Indians, by nature, stress a lot on both these subjects. It is acceptable to score in the 70s on your Hindi exam but anything less than a 90 on the science course calls for disciplinary action.

Then there’s this thing about choice. A lot of Americans are given the choice of what area/interests to pursue very early on during their schooling, whereas the earliest Indian students get a chance to make any type of choice is around the age of 16 when they decide if they want to be future engineers, doctors, artists, or writers.

Schooling doesn’t stop at the school. Almost everyone, especially the science and math majors, enrolls in post-school hours academic coaching which is often very rigorous. Coming back home at around 10PM after studying all day isn’t a rarity in India. You have to be a notch up than your neighbour if you want to succeed. There’s competition to even get into colleges, much less graduate from it.

In the end, I think it’s your personal motivation that matters more than textbooks or anything else. Sure, good schooling makes all the difference in life, but a good school system/books and poor students isn’t going to make anything happen. It’s all about imagining yourself at some position and then working your way to that position.


I pay, you pay, we all pay income tax

Yesterday was the last day to file taxes in the majority of the United States. The deadline is April 15th of each year, but this time an extra working day was given because the 15th fell on a Saturday, which is a non-working day for most of corporate America. Statistics are interesting, and in this case surprising that about 6% of American taxpayers (including legal as well as illegal aliens) request an extension of deadline. I never understood this, but I guess it just goes to show that people working in the hi-tech industries (bulk of taxpayers by my own account) are by and large procrastinators.

Now, while we are on the topic of statistics, let me mention that according to figures from the American Internal Revenue Service, about 44% of Americans are taxpayers. This is a great statistic simply because it takes the total population of the US in consideration along with the total number of taxpayers, while completely neglecting the number of undocumented aliens who file their taxes. This is because the IRS does not reveal these numbers to anyone. The IRS works on the premise that its main job is to get everyone in the US to pay taxes, not to enforce immigration laws.

An increasing number of such “undocumented” aliens are filing for taxes simply in the hopes of one day getting the “paper” making them a legal US citizen. This is a phenomenal thing. There’s lots of debate going on about granting these aliens legal status, and the fact that they pay their taxes makes a stronger case for them.

Another interesting fact is that the number of Americans filing a return with zero taxes due is also increasing rapidly every year. Does this mean that the economy isn’t growing at all? Does it mean that the number of poor people are increasing in the US? The answer to the second question is a “yes” from one of my earlier posts. Is the fact that an increasing number of Americans aren’t subject to any taxes at all an indicator of the tax law’s love for the middle class? I am baffled, and maybe someone can offer an explanation.

By the way, April 15th is also Leonardo Da Vinci’s birthday, the day Lincoln died, the day GE was incorporated, the day the Titanic sank, and the day that McDonald’s served its first hamburger! (

Economy India

There is poverty in America!

I enjoy meeting people and sharing views, and what’s more interesting than listening to an Indian born American citizen lament the phenomenon of open poverty in India! I had one such experience yesterday while sitting at a dinner table. We were talking about the emerging economies of globally delegated business visions when the focus changed to India’s fight against poverty. Now, I am not one to argue that there is no poverty back home. Sure, more than 25% of India’s population lives below the official poverty line. What I do take objection against is when people look solely at media portrayal or hard numbers against India irrespective of statistics.

Poverty in India is intermingled with the affluence. It is a fairly homogenous society in that context. On the other hand, America’s poverty is by and large extremely concentrated into geographical and sociological clusters. You don’t go about getting bothered by beggars, but you do see homeless people wandering about at rural intersections and downtown areas. In fact, according to the US Census Bureau, about 25% of the black population in the US lives below the poverty line! Sure, this statistic doesn’t mean anything when compared to the real statistic of about 13% living below the poverty line. It is a telling story though.

What’s amazing is that while Indians living below the poverty line have successively reduced in number since the 50s, the trend is completely the opposite in the US, where there are more people below the poverty line every successive year since the last 5 years, and where the number of people suffering from hunger has shown an upward trend over the past years. In fact, the poverty rate in the US has always been higher than that in the 70s.

Why then do we still not see India in the true light? India is working towards solving its problems while providing the world’s biggest democracy, freedom, and opportunities. We have achieved a lot over the years after independance. My request to the nay-sayers is to keep it up so that I have more reasons to be proud to be an Indian.

Economy India

Economic Cost of Indian democracy – 1% economic growth

Democracy in India reduces its overall rate of economic growth by about 1%. Startling as it might sound, it is a good price to pay. International investors as well as companies love to put their money in a non-authoritative regime. This is evident by the fact that although everyone has money in China, they have faith in India. Can we overtake China? Definitely. Is it a distant dream? Not at all. We’re only like 15 years behind China when it comes to the pace of economic reforms. The primary difference is that while China’s reforms are investment centric, India’s reforms are people centric. This is where we pay the price for democracy. Not to mention that China’s workforce is going to reduce by about 50% in the next 30 years, whereas ours will effectively double in the same time period.

India is a land of beliefs, languages, colors, and their associated idiosyncrasies. On one hand we have the pro-divestment, pro-globalization Government in power, while on the other hand we have the left. The Left has its own concerns; concerns which bear their own merit. It is hard to please everyone in a democracy. Indian democracy is corrupt, filthy, inefficient, lethargic, and polluted. But, things still get done. We are still the world’s second fastest growing economy, and at conservative counts, are growing at the rate of about 8% per annum.

I have made a brief, albeit slightly educated post on India’s economic growth before. Experts believe that a democracy can never achieve more than a 9-10% economic growth rate at all. I would like to study this verdict in detail, and would certainly talk about it when I do. A very good quote by Gurcharan Das, a prolific writer – “In the case of China, you have a government which is inducing this miracle, in India it is despite the government”. He goes on to say that the Indian economy grows at night, when the Government is asleep.

Why then, does India’s finance minister Dr. Chidambram believe that we don’t pay a price for democracy, rather the lack of it? Of course, he has a very rational view on the whole thing from the perspective of a democracy in India that is actually authoritative at certain granularities; a democracy where some people are still afraid of exercising their fundamental rights. Is it true that a democracy can exist without any ills of its own? Is it possible to be truly democratic? Is it possible to have a democracy where everyone is happy?

What changes the equation when we consider the economic synergies created between India and the developed, industrialized west? Why does the newly awake America love India so much? It is a fact that Indians rank second in their liking for America after Americans! Whereas 83% of Americans like America’s ways, about 71% Indians endorse it, according to an article in the latest Newsweek. Who wouldn’t want to do business with a country that likes their way of doing business?

Things are changing, and I am happy that we paid, and continue to keep paying the price for maintaining the world’s largest democracy. Post-colonial India has evolved. We have changed, and have even been through an authoritative regime, only to see our growth rate slow down further. The world loves us, and we are taking over the world by exporting intelligence and our way of (overcoming obstacles in) life.

In the words of Gurcharan Das – For 3,000 years, we have been working with knowledge that’s basically invisible, so it might just be that our core competence is invisible.

Economy Life and Personal

My Great Clips experience

Hair Care is a $55 billion+ industry in the US. It is also akin to the restaurant business in that it is highly recession resistant, and is almost always a guaranteed source of revenue if it reaches out to a good demographic.

I have a strange aversion to female hair dressers/stylists because of one bad experience. Nevertheless, I decided to give the new neighborhood Great Clips a shot because they were offering a haircut for $7. Now, each Great Clips franchise is independently run and offers the same kind of ambience. Every store maintains a list of names and addresses of their customers. This is not shared among the different locations, and I am guessing serves to maintain the spending/services received profile of every customer at a location.

In addition to regular hair care services, the company has also forged “strategic” alliances with product companies that market different hair care products for both men and women. And, what better way to reach out to potenial customers than to offer them a free trial of a shampoo or hair thickening lotion! I was offered a free shampoo as soon as I sat in one of the chairs.

Another thing I noticed was that my stylist was actually certified by Great Clips as a qualified hair stylist. This is something I have never seen before, at least at any run of the mill cheap salon. I was fairly impressed, and discussed hair care with her. She recommended me a particular shampoo and hair lotion, and even offered to give me a free trial of the lotion.

In the end, I walked out of the salon spending more than what I expected to, and wondering about how, for the first time, I actually enjoyed being a customer at a chain than an independent establishment. I am pretty impressed with the way American chains work. They are able to capitalize on a brand name with so much efficiency. This also made me wonder if there was anything similar back home in India. All I could come across in my search was a fairly new company called Brushman (India) Limited. I am not sure about the size of the hair care industry in India, but with such a large population, I am guessing it is pretty big. Now, it’s another thing that the biggest chunk of that industry rests with small little roadside barbershops offering hair cuts for a dollar.

Economy India Life and Personal Politics Tech and Culture

2006 is here !

The year 2006 has arrived. It is time to make new resolutions for the new year, and reminisce about the good and the bad of the previous year. 2005 was a very eventful year from every aspect. It was marked by natural disasters, economic growth, groundbreaking breakthroughs in science and technology, and various other events.

On the personal front, the previous year was quite eventful as well, with lots of everlasting memories and lessons in the game of life. I just hope that 2006 is a much better year for everyone, including myself.

Happy New Year, and may God bless us all !


USCIS reaches 2006 H1-B cap

H1-B cap reached

Just discovered that the H1-B visa cap for FY2006 has been reached. This signifies an acceleration in the demand for H1-B visas by corporate America when compared with the demand last year. The USCIS would not issue any H1-Bs for applications that are received after Wednesday, August 10th, 2005. The “cut off” date was October 1st, 2004 in the last financial year.

This is an interesting trend that clearly proves that the US is still the dream destination for tech workers from around the world, and that the economy is still growing. FY2005 marked the introduction of an additional 20,000 cap-exempt H1-B visas for professionals who have an advanced graduate degree from an American University. As of now, only 10,000 applications have been received in that category for FY2005, and only about 8,000 for FY2006. Infoworld has an interesting article that reports responses from various trade and industry groups about this USCIS announcement.

I am, personally, surprised that the cap was reached so early this year, especially when less than 4,000 applications were filed during the first 2 months of its availability. Of course, since I have a graduate degree from NCSU, I still have time to get one of the remaining 12,000 FY2006, or 10,000 FY2005 H1-B visas if need be!


How to conduct an error-free shuttle launch …

NASA launch


Relevance of the H1-B visa to offshoring …

I spent a good amount of time at Vel‘s place last evening drinking a couple beers and talking about the economy, university life, and other general stuff. During the course of our fun conversation, and after I had had 2 beers, the topic of the H1-B Visa provisions was brought up.

I believe that the H1-B Visa program, if implemented well, could actually curb the offshoring of jobs to a great extent. Ofcourse, like Vel said, an H1-B employee is akin to a regular employee for all practical purposes. Offshoring is inevitable, and the low end jobs are always going to be offshored to a cheaper country/location. We have seen this everywhere including India.

Before I explain my thesis, we must realize that one of the factors fuelling offshoring is the lack of a good primary education system in America. It is increasingly becoming harder for technology companies to find skilled and qualified people within this country. At the same time, it is crucial for these companies to maintain “primary” presence in the US on account of a good judicial system, mature company laws, and availability of global marketing resources. For example, Intel has 60% of its business outside America today. This is a common scenario across technology companies as the developing world plays catch-up and comes up as a big market for American products.

As a lot of people have pointed out, H1-Bs work with their American peers in America to further enhance the economy by paying taxes, buying billions of dollars worth of goods and services etc. This also means that they are being paid at par with the current wages prevalent in their industry. So, how exactly is this better than just offshoring the entire group to a cheaper place for the parent company?

You have to understand that it is not always cheaper to set up new operations in a cheaper country. We touched upon this last evening, and one argument against this was that it is always going to be cheaper in the long run. Well, when you offshore, you also have to factor in the quality of labor, and the value of such an investment. Value is derived from project turn-around times and other factors. These factors include local government policies etc. It is cheaper to offshore mundane tasks like call centers, basic IT development, and even telemarketing. At the same time, it is very difficult to offshore anything strategic. It is cheaper in other countries because of the availability of a large quantity of “mundane” labor. The very best is still in the developed world, and especially the US because of the quality of life and the higher institutes of learning that ensure that the very best stays in the US.

Sure, we are seeing the offshoring of research as well as product development now, but this is because of the growth of the developing world’s economies as a whole. USA is unable to keep development on its shore at such a high pace, and a lot of it has to do with politics, Govt. policies, and again, lack of etremely qualified and diversified people here.

Now, imagine if companies like Microsoft had their way, and the H1-B scheme was liberalized. The local companies would be able to hire the top talent from the world and stop other countries from getting forward. Sure, offshoring would still continue abated, but it would be more strategic than not. Surely, there is a reason why companies want to hire foreigners when they could just as well go with cost. I have been a firm supporter of the belief that costs catalyse offshoring, not fuel it. If costs were the only factor, then there would be no software companies in the Western Hemisphere. The McKinsey Global Institute has links to some very good articles and a panel discussion that touches on the need for a more liberal H1-B program.

If the H1-B caps are maintained at their current levels, at a time when the US economy needs more specialised workers than ever, it could prove catastrophic in the long run. I see offshoring as a short term solution. Other countries are not at all in a position politically, economically, or even socially to be havens for a global business. A car made by Ford in Mexico could cost the same as a car made by Toyota in the US. What matters is that Ford is still an American company and Toyota is a Japanese company having a bigger American business unit than a Japanese one.

I hope that the US policy makers realize this sooner than later.

Addendum: Interesting read – Immigration and Offshoring: The Graying of America