For quite some years, call centres have come to symbolize a new optimism for the ruling circles in India. They hope, these call centres will go a long way to boost foreign exchange earnings, provide high value employment opportunities to the educated youth and stop brain drain. Hence they are overjoyed. However, if one calmly and coolly reflects over the situation, one will find that the proliferation of call centres is not an unmixed blessing. Before we come to this, let us say something of the genesis of the call centres.

The phenomenon of call centres appeared in 1972 when Continental Airlines approached the Rockwell Collins division of Rockwell International (now known as Rockwell Automation) to develop the first automated call distributor so that the basic need to answer customers’ questions could be met. At that time nobody thought of the use of call centres to acquire and retain business. As The McKinsey Quarterly (April 29, 2005) reports, “The change came in the 1990s, with the advent of the software-based routing and customer-relationship-management applications, which increased the marketing possibilities of call centres.”

At present, call centres have become indispensable to the marketing and customer care strategies of most large companies whether Indian or foreign. At present each of the top 500 companies listed by the Fortune has at least one call centre. Each of these companies employs on an average 4,500 agents and more than $300 billion is spent on call centres throughout the world.

India, undoubtedly, is a major beneficiary of this phenomenon. Its English educated and technically qualified youth available at much cheaper rates has been the prime attraction for the Western companies interested to offshore (or outsource) their business processes. In India, the policy makers regard it as conducive to country’s interest in many ways. To begin with, it has put a gloss, temporarily at least, on country’s social and economic backwardness and poverty and India is being looked upon as a potential superpower. It has substantially slowed, if not fully stopped, the brain drain, which has been worrying the country since Independence. In the opinion of Washington Post, “the new jobs from outsourcing have given a psychological lift to a generation of educated young people whose options might otherwise have been limited to paper-shuffling jobs in government offices or musty state-run banks, if they were lucky enough to find a job. And increasingly, it is helping to lend a sheen of prosperity to regional capitals…” It has given a boost to the development of information and communication technologies and created lots of jobs for the talented and hard working youth. A veritable information technology industry has emerged, which has more than $10 billion as annual export earnings to its credit.

At present, the number of jobs outsourced to India ranges anywhere from 400,000 to 700,000. By 2008 as many as 4 million Indians will be directly or indirectly employed by the call centres. If everything goes all right, by 2015, as many as 2.5 of 3.3 million jobs, outsourced by the United States will come to India. To quote Rabindra Kar’s recent report, “If in the same period the European Union, Japan, Australia and Canada combined outsourced twice as many jobs as the US, that would total 7.5 million jobs in 2015.”

This figure of 7.5 million jobs may otherwise look impressive, but not in the case of India whose total population is predicted to rise to somewhere around 1.2 billion. The size of working-age population will be more than 300 million. In view of this, not more than 2.5 per cent of working-age population will benefit as a result of outsourcing. Thus over optimism of the central and of so-called forward looking State governments seems to be misplaced and welcoming multinational corporations with tax incentives and other concessions like creating technology zones is unwarranted. It must not be forgotten that multinationals are outsourcing jobs to India not because of any genuine and special love for this ancient land of ours but because it is in their interest of maximizing their profitability by reducing the cost of labour. The same amount of labour costs much more in the West than in India. It is simple economics!

Prospering outsourcing business is creating problems for the country as well as those working in the call centres. Let us begin with the latter. The nature of work in the call centres is quite onerous. Since the call centres have to cater to the needs of the customers in the countries in time zones quite different from India, they work almost throughout the night. This has led to a very high incidence of sickness among the workers at call centres. Frequent indigestion, hair loss, back pain, mental stress, etc. have been the order of the day. The female workers have to face gynecological problems. Most workers do not have active social life because when they come back home they feel sleepy and their friends and relatives are away to work and by the time they are awake and their friends and relatives are back it is time to prepare for going to work. The incidence of smoking and drinking has increased. However high the earnings may be, they cannot compensate for a good night’s sleep. It has also been found that assuming artificial (foreign) accent for long periods injures the voice and causes sore throats. It is needless to add that life becomes mechanical. Consequently, turn over rate for workers at the call centres is 35 to 40 per cent. Workers seldom have job satisfaction. Most young men and women leave their call centre jobs after their marriage because they cannot enjoy happy family life. It is not without reason that a quite significant proportion of the youth working at call centres is forced to consult psychiatrists.

Moreover, the workers quite often face the fury of irate customers who hurl at them abuses and talk in indecent language. There is no law to stop this effectively. The workers feel humiliated and insulted, but they have to endure for the sake of relatively high salaries and fear of facing a long period of unemployment. Since the companies outsourcing their business processes have to maintain constant surveillance over the employees working at the call centres to maintain secrecy of the data and the identity of the customers, the atmosphere is somewhat tense and regimented. Workers cannot but feel its pressure. In recent times, the news of pilfering the data has appeared in the media a number of times.

At times, one finds that the fact that a country like India cannot solve its problems of unemployment and poverty by relying on call centres is quite often forgotten. At best, outsourcing can be a palliative, not a long-term solution.

The outsourcing business has given rise to unrealistic expectations among a section of the urban youth, which wants to ape the American style of living. With relatively very high salaries and perks from the Indian standards, the young men and women working in the call centres are being chased by automobile manufacturers, mobile telephone companies, builders, fast food companies, hard and soft drink sellers, the publishers of glossy magazines, and so on. Banks and other financial companies flush with money have been trying to persuade them to borrow to spend on goods and services that will help them catch up with American middle class living styles. Credit cards are a convenient device to push these young men and women into a debt trap by prompting them to spend more than their existing capacity. So far as the country is concerned, the pattern of production is getting distorted. There is more emphasis on catering to this nouveau riche than caring for the vast masses, not being able to meet their basic needs. Even a cursory glance over the newspapers, magazines and the contents of the electronic media confirms that they are basically oriented to this section of the society. It is needless to add that this is fraught with grave implications. The “demonstration effect” of the life-styles of this section of the society is bound to lead to increase in criminal tendencies.

In the end, one must not ignore what The Economist (February 21, 2004) wrote under the caption “India’s Shining Hopes”: “No boom is unstoppable or everlasting, and a thinning of the ranks of the hundreds of new BPO firms is inevitable. There is a limit to how much even the most zealously cost-cutting firms are willing to outsource, and India’s BPO industry faces a number of dangers: protectionism in its most important markets; over –reaching itself; third-country competition; and government meddling.” The BJP-led NDA ignored the warning contained in the above-mentioned 14-page report and met its doom.

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