Indian industry is due to suffer a major blow, as President Obama is getting ready to end the tax break for companies who are outsourcing jobs overseas.
He accused opposition republicans, of putting politics before economy and encouraging companies to outsource jobs and profits to other countries.
He was speaking during a mid-term campaign in Ohio Wednesday. He emphasized that the tax breaks should go the companies wh
o create jobs in America. He also vowed that he would allow Bush era tax-cuts to expire for the people who earn more than $250,000, which the tax-cuts would be extended for the people who earn less.
He is also determined to push a new $350 billion plan to recover a failing economy which includes tax cuts for business to write off 100% new investments and to purchase new equipments. White House officials estimate as result of this plan, 1.5 million companies will benefit and it will be largest temporary investment incentive in American History.
He also highlighted a new proposal for the investment in infrastructure and also for extending tax credits for new research and development to businesses.
He emphasized that the difference between the vision of republican and democratic is of vision. While Bush era, allowed tax-cuts to be given to companies, who outsourced jobs and profits to other countries. While he is going to encourage companies, who will retain jobs and profits in America.
He also urged the Senate to pass the small business job bill that is stalled due to the differences between Republican and Democratic differences.
It should be noted that a major part of profits of Indian IT and BPO Jobs comes from outsourced jobs and services of American companies.
Source: indianviral.com
Obama to Act Against Outsourcing Jobs
US loses 54,000 Jobs, Obama Promises New Package
WASHINGTON, USA: As the US lost 54,000 jobs last month, President Barack Obama promised a new package of ideas next week on job creation and lashed out at Republicans for blocking a legislation to help small business.
Obama's renewed criticism of opposition Republicans came in the wake of Friday's release of new unemployment figures showing a r
ise from 9.5 percent to 9.6 percent in August.Economic recovery in N.America slipping.
Most of the job losses in USA, however, came from the public sector as the government cut 114,000 temporary census workers according to the Labour Department. Private businesses added 67,000 jobs to their payrolls.
August was the eighth straight month that businesses added jobs, following nearly two straight years of job losses. So far this year businesses have added 763,000 workers to payrolls.
"That's positive news," Obama said at the White House, flanked by his top economic advisers. It "reflects steps we've already taken to break the back of this recession."
"I don't regret the notion that we are moving forward ... because of the steps that we've taken," he told reporters. "The key point I'm making right now is that the economy is moving in a positive direction. ... We just have to speed it up."
But he warned, "There's no quick fix to the worst recession we've experienced since the Great Depression."
Senate Republicans, he said, were responsible for a "needless delay" in the passage of legislation designed to increase bank loans to small businesses.
Specifically, the measure would set up a $30 billion lending fund to help community banks offer small businesses credit. It also would provide tax breaks to small businesses that invest in new equipment and hire unemployed workers.
The House of Representatives passed a similar bill in June. Republican opposition has focused, among other things, on the cost of the measure.
In a statement, Republican National Committee Chairman Michael Steele said, "With 54,000 more Americans finding themselves out of work this month and unemployment rising to 9.6 percent, President Obama's 'Recovery Summer' has ended right where it began, with Americans continuing to lose their jobs and unable to find new ones."
India invested to Created 60K jobs in USA
India, often accused by American politicians of hijacking jobs from "Buffalo to Bangalore", has actually created about 60,000 jobs in the US in the last five years with investments topping $26.6 billion, says a new study.
These investments included 372 acquisitions worth $21 billion by 239 Indian companies and 127 greenfield investments worth $5.5 billion between 2004 and 2009, said the report, "How America Benefits from Economic Engagement with India", released on Tuesday by Congressman Jim McDermott.
The joint study by University of Maryland, India-US World Affairs Institute and Federation of Indian Chambers of Commerce and Industry (FICCI), pointed out that the 127 greenfield investments where a parent company starts a new venture from the ground up, also created 16,576 jobs in the US.
The top three destination states for greenfield investments were Minnesota, Virginia and Texas and the top three states in terms of jobs created were Ohio, Texas, and California, the report said.
Software and IT services sector, another bone of contention among US politicians, actually received less than 15 per cent of total Indian investment, and the bulk of investments went into mining, manufacturing and other industries, the report noted.
The five US industrial sectors that received the most greenfield investment were metals, software and IT services, leisure and entertainment, industrial machinery, equipment and tools and financial services, accounting for almost 80 per cent of total greenfield investment in the US.
Five states that attracted the most investments through mergers and acquisitions (M&A) by Indian companies accounted for 75 per cent of total deal value: Georgia, New Jersey, Michigan, California, and Texas.
The five leading US sectors receiving M&A investments from India were manufacturing, IT & IT enabled services, biotech, chemicals and pharmaceuticals, automotive and telecom - for a total of 83 percent of total deal value.
The bulk of M&A investments by India Inc in the US were in manufacturing and other industrial sectors, rather than in services for which India is well known.
The value of US acquisitions by Indian companies fell in 2008 and then again in 2009 even more steeply, a result of the worldwide recession, the study noted.
"It is, however, interesting to note that greenfield investments rose through 2008, achieving their highest level that year, and then registered a decline in 2009, though the decline was not as steep as for acquisitions," it said.
"This is possibly because making a greenfield investment is a longer-term decision, while acquisitions are often opportunistic and accomplished relatively more quickly."
The study follows a move by US President Barack Obama to end tax incentives to US companies that ship jobs overseas from "Buffalo to Bangalore" through outsourcing, and instead giving incentives to those creating jobs inside the US.
"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," Obama had said in his State of the Union speech.
A 2004 Goldman Sachs report had forecast that nearly six million US jobs would be shifted overseas to low-wage countries like India.