The new US President Barak Obama has unveiled a 850 billion US dollars stimulus plan which is expected to create over two million new Jobs in the US over the next few years. The plan includes infusion of funds into the weak banks, with a clear aim of putting the banking credit flow for the industry back on track.

The plan also includes support for the automobile industry, which is still under negotiation. Obama wants a good part of the amount to go to the lower income group people, in order to help them to keep their homes for a longer period. He strongly feels that the extended period of retaining their homes could help these low income people to work towards paying all their mortgage dues on time and retain their good credit rating.

He is also planning to spend a good part of the plan amount into infrastructure building including roads, bridges and power plants, which could generate more jobs for US citizens. He has also said that any US company taking the support of stimulus fund has to give priority for jobs for US citizens. He is also planning to put a ban on hiring of foreign talents by companies taking tax breaks.

This is expected to result in a sharp contraction in the outsourcing of jobs by US companies to low cost high output countries like India. But with the business environment in a very bad shape with all key industries like banking, insurance and automobiles reporting dismal performances, the US companies do not have any choice over cost control. Most of the US companies are bleeding, and they need to use every avenue for cost cutting, and the primary source could be outsourcing of highly paid jobs.

By doing that alone, the US industry can reduce their losses by 100 to 200 basis points, which is quite lucrative for the industry. But they cannot go against the government directions at least for the time being, and hence outsourcing is likely to remain curtailed for some more time.  Once the US economy shows some signs of revival, and the focus shifts on to growth management instead of crisis management, the US companies can slowly start outsourcing some of their high cost jobs to countries like India. Till then outsourcing has to definitely wait.