Microsoft CEO Steve Ballmer says software piracy in India is so bad that it's holding back the country's economy. But if India can reduce piracy by just 10% it would create 50,000 new jobs, says Ballmer. Question: Where will those jobs come from?In an interview in Tuesday's edition of the Times Of India, Ballmer says piracy is having "a huge negative impact" on economic growth in India. He also cites an unnamed study indicating that 70% of all software used in the country is pirated. Reducing that number by 10% would lead to the creation of 50,000 new jobs in India, Ballmer says in the interview.

Ballmer isn't specific about what, or who, would create those jobs -- but here's a couple of thoughts. Compared with competitor IBM, Microsoft's presence in India is puny. About 5,000, compared with IBM's 50,000. In other words, Microsoft has a lot of room for growth in India. And it needs growth in India to keep up with its rivals.

So Ballmer may be suggesting that Microsoft's head count in India could rise quickly and dramatically if the country takes a more aggressive stance on intellectual property protection. A larger presence in India would allow Microsoft to better tap in to the country's pool of highly skilled, but lowly paid [by American standards] programmers.

It also could help Microsoft defeat calls by some left leaning legislators in India -- notably in the state of Kerala -- for the mandated use of Linux by Indian governmental agencies and schools.

The concern, of course, is that a larger Microsoft presence in India would come at the expense of programming jobs in the U.S. Microsoft employees in Redmond may be hoping that India doesn't take its piracy problem too seriously -- it may be the best job protection they have.