Happy New Year!

Happy New Year!

As we hope of a very bright future for India in the new year and beyond, we are being warned of some challenges ahead.

First and foremost the Subprime meltdown in the US which is dragging the US into a recession (mild or severe is what the debate is about). The bright side to this is that the US corporations would like to cut down on costs and this would mean higher outsourcing to India.

Second, the Rupee appreciation. I feel the Indian industry would learn to cope with the Indian Rupee appreciation. What came in 2007 was an unexpected large move. In future I think it will be more of a steady appreciation.

Third, the shortage of skilled people to fill up the jobs. This is a current problem, which has caused huge increases in compensation at all levels. This cannot go on forever. I think that major reforms to the Education system like allowing entry of foreign institutions to train the Indian population would take care of this issue. The compensation levels cannot go up forever and would flatten out or increase at reasonable pace as we lose the competitive edge.

All the best for a wonderful 2008!