Nasscom Reply is full of holes

May 31, 2007

I am commenting on the recent reply to American Senators by NASSCOM, nodal body of software companies in India . The press report on the reply is here.

Nasscom’s press release is hosted here

Predictably Nasscom replied in the nick of time. Senator wanted reply to questions by 29th of May. Nasscom not only replied when the clock struck 12 on 29th May .. but actually replied on 30th May in India..( there is time lag of 12 hours between India and US )

A copy of the letter sent by senators to one of the companies accused of fraud is here

Now back to what NASSCOM was asked and what NASSCOM supplied.

NASSCOM/ Companies were asked to provide Data on four counts namely NUMBER, WAGES, OUTSOURCING and LAYOFFs. There were 8 questions on NUMBER, 2 each on WAGES and OUTSOURCING, and 4 on LAYOFFs.

NASSCOM reply does not seem to have answered any of the questions raised by senators. I have already commented that it is a familiar tactic. If your doctor asks your temperature, you reply that your neighbor weighed 200 pounds.. What kind of logic is this.

Following are fatal flaws in NASSCOM reply

1) Pointing out that US universities applied for 20000 H1Bs last year.. US universities are cap exempt. So why does NASSCOM want to compare cap subject visas used by NASSCOM members with cap exempt visas. It gives a feeling that NASSCOM wants to downplay the visa figures used by its members. – First flaw in NASSCOM reply is that it is comparing apples and oranges

2) Claiming contribution done by H1B immigrants as its own. Remember HIBs are treated like dirt by these Indian Companies. Ron Hira has provided much more detailed analysis on labor arbitrage and short sightedness of these companies.

3) Downplaying Visa figures at one part of reply and Extrapolating Visa figure at another part of the reply. At one part the reply NASSCOM says that the cap for visas is 65000 and no more than 80% of is available for business because 20% of it is taken by US universities. Based on that figure, there should be only 52000 visas and hence fraud prevention fee collected should amount to 52000*500 = 26 million usds. ( fraud prevention fee is 500 USD per application)

However in later half of the reply NASSCOM boasts that about 300 mil USDs amounts to fraud prevention fees the businesses pay .. making it appear as though a pot of money is transferred to Uncle Sam because of these companies.

To arrive at the this new figure obviously NASSCOM has used a different number for H1Bs issued per year. Since H1B transfers are treated as separate but cap exempt applications, number of H1Bs and L1s approved last year if both cap subject and cap exempt visas are considered was actually around 600000. And figure of 300 mil was arrived probably by multiplying 600000 with 500 USD fraud fee per application.
Clearly this is akin to using different figure as and when it suited NASSCOM. .. or a fraud in reply..What more you can expect from a fraudster?

NASSCOM has done more damage to its own cause by doing these deliberate misrepresentations.

I will expose another fraud of mind boggling proportions perpetrated by NASSCOM later some times.. Meanwhile feel free to share this with others

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