18
Jul

Government blaming the IT Sector Now?

Posted by shubham

The policies of Indian Government, their strategy and then finally the implementation is such a process that I should probably not even discuss it. Indian Government has done so many wrong things that probably by failing to fail they did something right. So when I read an article in Times of India stating that RBI has accused the IT Companies of failing the government in providing financial inclusion, I could not help but smile! Quoting from the article

“The scale of business in financial inclusion is so big that we need participation from big IT companies,” said KC Chakrabarty, deputy governor, RBI, speaking on the sidelines of a financial inclusion seminar organised by Skoch, a consultancy firm. He added lack of interest and involvement by big IT companies was making banks’ endeavour of financial inclusion unsuccessful. According to Mr Chakrabarty, involvement of big IT companies was important to bring down the transaction cost.

The Indian Government has adopted the best strategy, when you can’t achieve something then just blame someone who is doing well! Right now it is the private sector and the IT Companies. Lets try to see another side of the argument.

1) The IT Companies are companies with shareholders who have given money for investment to these companies and expect a good return on investment. Nothing wrong with that, if the companies don’t generate sufficient profits then Government will say IT Sector is not skilled, efficieint or something. Thus the IT company must work for the best possible return on investment which probably comes from outsourcing contracts.

2) The IT Company also has limited resources and will want to use them to get the best results. The IT Company does want to support India and it is already doing so by providing jobs and training to Indian Citizens. Most of all it is a sector which has not received much support or subsidy from the Government and still employs millions in India.

3) Why should the burden of financial inclusion be on IT companies? Why can’t Government take on that task and complete it on its own? Does the Government lack sufficient technology? Does the Government lack funds to hire the IT Companies? I think the only thing lacking is the Government’s will to act!

4) Has the Government even asked the IT companies to help? Indian IT companies for the past 1 year have had so many employees on benches that they could have done the Government projects for free! But has the Government even asked them?

A bad worksman always blames his tool and the Indian Government seems to be acting exactly like that. Maybe someday they will improve, I will wait for that.

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Category : Business / Planning / Public Issues / Strategy

5 Responses to “Government blaming the IT Sector Now?”


natrajan July 18, 2009

I’d differ on 2 points

1. Indian Govt has given Tax subsidies to the IT industry which is about to expire and NASSCOM is lobbying with the government to extend the subsidies.

2. A bench in an IT company is a strategy employed by the company to eliminate dependency on skilled workers. That is why any IT Company overhires and puts people on the bench. This brings down overall salary levels.

I agree with the remaining points and also agree that the Govt should not find faults with such an efficient Industry like IT.

AT_korvus July 18, 2009

@Nattu: re point 2, brilliant! never thought of it that way o_O

natrajan July 19, 2009

@ AT_Korvus thanks buddy

Kaushik July 19, 2009

“Most of all it is a sector which has not received much support or subsidy from the Government and still employs millions in India”

What about Sofware parks, STPI and all those tax holidays that IT Firms enjoy?

Abhishek July 20, 2009

” The IT Company does want to support India and it is already doing so by providing jobs and training to Indian Citizens.”

Is the IT company providing jobs and training to “support India” or to generate wealth for shareholders as mentioned in point 1?

“Most of all it is a sector which has not received much support or subsidy from the Government and still employs millions in India.”

The IT industry pays the least tax (between 12 – 15%) as opposed to the statutory tax rate of 33.99%. This is due to the various STPI, SEZ and other exemptions as mentioned by Kaushik.

Also, isn’t there a difference between saying “The scale of business in financial inclusion is so big that we need participation from big IT companies” and “accusing the IT companies of failing the government”?