R U Scared of Obama

Indian IT, IT-service’s companies are not feared by Obama’s proposal to repeal tax breaks for companies that outsource certain operations to offshore centers.
The tax plan by Obama stats that US companies who doesn’t outsource their job work will get a better tax benefit and by this will create job opportunity to robust US economy and stabilize the market.

The tax plan proposed by Obama, who will be sworn in as president on Jan. 20, seeks to revoke this benefit. “Such provisions may have the perverse effect of making US companies uncompetitive in overseas markets rather than deterring offshoring,” the Macquarie analysts said.

“I don’t see Obama doing anything terribly drastic. I think he has enough on his plate; he has got a trillion-dollar bailout and probably got another trillion dollars coming on top of that which he has to finance,” Genpact Ltd’s Chief Executive Pramod Bhasin said at the Reuters India Investment Summit.

Indian IT-services companies like Infosys, Wipro and Tata Consultancy Services Ltd could get an edge over US companies such as Cognizant and IBM, they said. The India-domiciled companies will continue to pay lower taxes, while Cognizant and IBM will have to pay out more, the analysts said.

“Barack Obama will repeal tax breaks that reward corporations that retain their earnings overseas, and will use those savings to lower corporate tax rates for companies that expand or start operations in the United States,” according to Obama’s website, www.barackobama.com.

Obama’s tax plans are unlikely to affect the outsourcing industry because of the scarcity of IT talent in the United States, Suresh Senapaty, chief financial officer of Wipro Ltd, told the summit, held at Reuters Bangalore office.