‘Indian IT doesn’t benefit its own people’

Yes, thousands of young people are getting jobs even before they step out of their colleges. Yes, the travel is good. Yes, the “world-class facilities” have given our cities a nice sheen. Yes, it has fetched India a place in the word. Yes, real estate is booming and as N.R. Narayana Murthy‘s proud boast goes, hundreds of taxi-wallahs are also earning a living. (And maybe the dowry menace came down!)

But is putting all the eggs in the Information Technology omelette such a good thing?

Wise heads like Prof. C.N.R. Rao have bravely spoken out against the long-term damage that we could be causing to our society if all our best and brightest end up doing the same thing—writing code or answering phone calls because the money is good. What happens to linguistics, sociology, geology, history, philosophy, etc?

Privately, many captains of corporate India crib about what IT is doing to them and to the country by sucking away all the engineering talent. But not too many have the cojones to express their views in public for fear of being branded as “jealous” or “anti-IT”.

A.M. Naik, the chairman of managing director of Larsen & Toubro, has bucked the trend in an interview with the Bombay newspaper, DNA.

***

# Infosys is so focused on making 26% profits after tax, their India revenue is less that 1.5%. So India doesn’t benefit with its own people. This makes me angry. Now they say they are looking at India and China, forced by their profitability issue. Not because they have any love for our country!

# Talent drain is India’s biggest problem. Previously the drain was because the talent was hired to go abroad. Now it is due to the outsourcing industry within India. Four out of ten Indians go abroad after using India’s highly subsidised education system and 90% don’t come back. Of these, four out of five go into outsourcing. Consequently they are only working to give advantage to the US, Europe and Japan. They are designing the product here and taking it to China to manufacture.

# China’s 52% GDP accrues from manufacturing. India shows only 17%. China’s manufacturing has spread into the second and third tier districts. India is shining only in 12 cities. One Chinese engineer creates 20 jobs only because of the country’s manufacturing prowess. An Indian engineer sells his man hours and fails to create any job for his fellow Indians.

# When I grumble about the outsourcing industry sucking away India’s talent it is because I want the powers-that-be to realise that outsourcing beyond a point is not in our interest. My complaint is that these companies sign up civil engineers, mechanical engineers, electrical engineers.

# Why can they (IT) pay better salaries? Because L&T works at 7-8% PAT, they work at 26% PAT. I cannot overcharge the nation. They charge it because of the cost advantage gives them enough leverage and gives their employees double and they still end up making 26% PAT. I doubt if they will last for long.

# The least that the politicians can do is stop cutting ribbons in the outsourcing industry. There are more than 75,000 engineers working on design in India for foreign companies. They are the brains, and there are 150,000 other engineers working in the IT industry who are non-computer science engineers. Then the Bangalore Club complains that infrastructure there is cracking. Arrey tumko kisne bola tha 100,000 engineers leke aao Bangalore mein. Secondly, who asked you to recruit civil engineers? There are no civil engineers available to build infrastructure!

Read the full interview: ‘This life is reserved for L&T’

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28 Responses to “‘Indian IT doesn’t benefit its own people’”

  1. ERR Says:

    Science has lagged behind in the country because the CSIR labs are run in a bureaucratic way.Only few top,expirydate -over scientists hog the limelight amongst themselves;it is still run as a personal fiefdom.Freedom is rare to persue their arae of interest.A myraid problems hae dogged the R& D labs with least importance to the name they carry- Research. Such a stifling environment is not a great place for budding scientists to work.The atmosphere should be conducive for research on all aspects, including remuneration.

  2. gundabhat Says:

    Mr Naik statements seem ridiculous at best.

    He cannot “overcharge” the nation………total bull crap…….. what now is he a chairman of CPI (M) or L&T. I dont get it………..not that I am a fan of Infosys and Wipro…….IMHO their software services suck at best but are dirt cheap ………….is L&T is not building useless flyovers all over the country in the name of “development of infrastructure”. Yet another case of pot calling the kettle black.

  3. pragmatic Says:

    good one Mr. Naik. Big time the ITechies understand the magnitude of problem that India will have to face in a few years from now.

  4. Protima Konar Says:

    Dr. CNR Rao is most respected living scientific giant we have in India. No wonder, he has said what many of us have been thinking for long.

    Bestest & brightest students are now choosing IT, medical science. They are not pursuing BASIC SCIENCES, COMPUTING.

    IT need not to be stopped. Let it do whatever its doing. But Govt policy must give INCENTIVE to basic sciences. Too much vested interest is stopping education become free of govt control.

    Alas, we have education minister like ARJUN SINGH who does not see beyond caste line, and how to destroy higher education. And we have LEFTISTS who have infiltrated our higher education system and destroying it from within. Just look at top scientific institutes in Calcutta – now fully damaged by recruiting party cadres.

    We as a nation lack STRATEGIC THINKING. We are being divided deliberately by political parties for votebank. Elite media also plays its part in that. Someday, I do hope, we will wake up and set things in order. Think 50 years in advance. Hope it will not be too late.

    Protima Konar/ Connecticut/Kolkata

  5. Alok Says:

    Wow.. what a stereotypical ignorant view of the IT Services industry. Its a bit like a slave owner after emancipation cribbing about the death of the cotton industry now that all the slaves have been freed….

    No doubt the Government can start to cut back the tax holiday for IT Services , but that they are somehow obligated to start driving people into the “brick and mortar” industries is ridiculous.

    The whole “government subsidized education” is a fallacious argument because even the food we eat is mostly government subsidized in one way or the other, let alone the petrol we use, the electricity we burn… If “government subsidized education” is a reason not to take up a job abroad, then we should all be the indentured servants of the Government because it provides food, shelter and water.

    IT Services companies cannot afford to focus on India alone because the market is too small, and opportunity for profit far less. L&T itself touts the re-building of the bridge over the River Kwai in Burma, and demands that IT should be India specific?

  6. bmurali80 Says:

    It’s high time…IT people in these consulting firms are becoming fit for nothing. Many of the youngsters are not in the place they are supposed to be.

    Civil, Chemical, Mechanical engineers need more high end work in India. This is the only way people can get interested in these fields. IT is only an enabler not the main force.

    It will be interesting to see how they stop the ‘Junk IT’ brain drain.

  7. tarlesubba Says:

    i only wish IT walas contribute to automation of governance, provide technical expertize to the various departments, in exchange for subsidies.
    that will be well worth it.

  8. pragmatic Says:

    gundabhattare, are flyovers useless?? what crap are you talking? L&T is not not building them for themselves, but it is just a contractor which does the construction when the Government or any other private party asks it do so.
    and what do you know about the present status of construction in India to utter all non sense?

  9. chappar Says:

    This is what has still kept India under developed or developing what ever way u want to put it………. instead of raising their standard to attract talent you want to lower soem ones level to balance the equation??
    Whay should I toil for 15 hrs in a construction site which does not even provide a basic necessity like a rest room for and take home 10K per month…. where as if I put in that same 15 hrs of work in IT I am compensated at a higher rate. If the compensation is just or not is the argument the argument is when there is inflation and when you have to give up a part of next 30 year salary as EMI for a over priced house I see no reason why I should quit IT.
    And dont teach us patriotism and saddle us to our country…… what the hell are politicians doing ?? Every one over here looting the country why call wolf @ the prompt tax paying junta what goes around comes around…… If they go abroad to make more money they buy property back in India and pay tax on property and help in the growth of economy…… did not understand what exactly L&T guy is cribbing about……..is L&T not able to put a tab on its attrition ???

  10. Pramod Biligiri Says:

    I mostly agree with Alok above. Every company that turns in a profit, be it through exports (IT) or local market (L&T) is a valuable contributor to the economy.

    Govt. should do away with subsidies for IT. Better still, focus on reducing taxes for all the industries so that money is freed up for the economy.

    Talent crunch is a reality of life. You can’t expect the government to solve it. Either shape up or ship out.

    CNR Rao is getting pretty annoying. I agree with him that fewer people are taking up basic science. It’s because there are no jobs there and the country doesn’t need those skills. He’s highlighting what he thinks is a problem. But I hope he doesn’t influence our government to launch some crazy “Promote Science” scheme which will only be a waste of taxpayers’ money.

  11. Goldstar Says:

    Absolute crap…

    1. TCS does a lot of work for the Govt. NSE/NSDL/Railways and a host of other Government/quasi-govt projects are handled by companies like TCS.

    2. What is the profit margin of L&T Infotech? L&T Infotech is not a listed company and so has no need to publish its results… but once this company is listed, Mr. Naik will be eating his own words.

    3. Many service companies, which are not in IT, for e.g Bharti, or Reliance (retail, Capital) pay much more than IT companies. And don’t even start talk about Financial services companies… So is Mr. Naik going to crib if MBA’s prefer Financial services to Manufacturing?

  12. Srinivas Says:

    I think author has gone in to the loop of comunists who use to oppose IT is now behind IT. The way author writes is nothing but the any comunist paper who is jealous about common person being comming up. Once common person comes up in the life on his effort, he never cares about Counists. This is the reason where auther and people like him talk nonsense about IT.

    Dear friend for your information Indian poverty can’t be wiped out in a year or two. The process is staretd and graduly it will dispear over a period of time. Look at the way IT and this helping. Because IT many got job in Taxi driving, Auto driving, Suppliers in Hotel because many hotele came up, Building workers got daily job because many infrastructures comming up. Many spending caused many shopping complex comming up there by creating many jobs there. There is a link from IT to every jobs growth. If you fail to understand this reaility then you are the one of biggest idiot and foolish in India who knows barking and doesn’y do any work. People like you are reduced in India lot yet we see one lakhs like youe. Try to understand the links from IT growth.

  13. Kadana Kuthuhala Says:

    Yeah..right….we all should give up our jobs and start becoming socialist clones!!

  14. Nastika Says:

    Also think about the money spent by IT guys on food, clothing & shelter and the money flow into each of these chains !!

  15. Gokulam 3rd Stage Says:

    This is so asinine that…..

    Forget it. No point repeating the same thing to idiots who won’t change.

  16. Aruna Urs Says:

    I can only assume two things.
    1) L&T infotech is doing badly
    2) L&T is trying for big contracts with the help of Left.

    So L&T has not paid any kickbacks in its history?

  17. Doddi Buddi Says:

    GK3S

    Don’t give up! It is time all this jazz about IT is put to the test. Great comments from Protima.

  18. Anonymous Guy Says:

    The tax breaks for the IT companies dealing in pure body count with little intellectual property creation and no real selling products should stop. Or more tax breaks should be given to other sectors of the industry? Or whatever tax re-structuring required to put things on an even ground.

    Once this is done, and things still dont change in terms of ‘engineering talent being stolen’ etc. – then we can gauge how much of Mr. Naik’s other insinuations about the IT sector are true.

    While he has valid points about the state of engineering in India, some of his comments sound like L&T has a sole right over engineers. Their will doesnt seem to matter to him (dont go abroad, dont join IT company, come to me). Kind of like communist China.

  19. Thyampanna Shettru Says:

    Reminds me of an old story of Jackal and sour grapes…

    draakshe hannu huLi huLi….

  20. Anonymous Says:

    Mr. Naik can’t be serious. L&T Infotech is in the same business as Infosys, TCS.

    If L&T wants to be a serious contender in the IT industry, it has to change its ways — namely pay higher salaries. It is not a good sign that L&T makes huge profits, but its employees don’t get suitably compensated!

  21. pradeepc Says:

    “What happens to linguistics, sociology, geology, history, philosophy, etc?”

    Are there really any jobs in these fields ? Even if one manages to find a job in any of the above mentioned field, what kind of salary would he make ? Is it wrong that people would want to go to an industry where they are paid higher salaries ?

    Above all, if there is a shortage in any of the other industries, over time, people would start to move into that. Is there any need for people to be geologist just because some time in the future there might be a shortage of geologist ?

    We should not forget that IT has played a good part in getting our economy into a pretty good shape.

  22. Sanjay Guha Says:

    It is a free market. It is for the Infys and the L&Ts of the world to figure out whether they provide software services to the overseas market or cater to the domestic market. If L&T builds bridges in India it sees an opportunity there. If the dollar goes down tomorrow it will reflect on Infy’s PAT not on L&T’s. Corporations are there to provide a product or a service and make profits. Trying to pass off your lower PAT as a result of the honourable values of a corporation does not fool anyone. In a country like ours with a huge middle class opportunities drive education. At one point in time mech engineering was sought after because there were a lot manufacturing companies employing mech engineers and paying them salaries they could live with. It’s the same with IT now.
    Sure we ought to encourage people with the right aptitude to pursue the field of their choice. But finally there should be opportunities for them. In a free market opportunities are created by the market. As far as infrastructure in cities goes, the government and the civic authorities have consistently screwed up and continue to do so. Blaming it on IT doesn’t help at all.

  23. Anonymous Says:

    Mr.Naik has only spoken a very sensible thing as to how the brain drain happens in the country. The response of many of the ITechies, clearly and visibly shows their ignorance and insensitiveness towards the society. What the hell do they think?
    Without the builders for basic infrastructure, will it be possible to have an It Park or can these guys work or live?
    Naik’s contention is that if the trend continues the people including the present ITechies have to live inside their office itself and in future it will be in the hutments and in remote villages. Any sensible person will focus on the immediate needs ( for survival) without losing the sight on the future, which alone he has done.
    Let the ITechies bear it in mind that the engineers who are in their core business can do the ITechies’ job at any point of time with little training and orientation but it is not the other way. They also need to realise that their managements have already realised this and have started recruiting other Graduates (non engineers ) and even candidates after Highschool levels. The days are not far off for these guys to realise this. Rather, Naik has not undermined their knowledge and talents and on the other hand he only questions as to why the best of the brains and talents of the country should be underutilised ( which can be done by an ordinary graduate or a school finalist ).

  24. Neha Says:

    Every time Dr. C.N.Rao and Prof. Yash Pal talk on students taking up IT and computer related subject and not basic science I feel frustrated. I have showed you thousands and thousands of science graduates who after there graduation and post graduation have to struggle everyday to get job. If they get one the pay is very low, But he/she would have paid a hefty amount to get his science degree. The is now trying to promote science but look at the infrastructure used for training the students Nothing helps by saying science is dying out in India we need to save science. Even I having a post graduate degree in basic science have struggled to get a job, even could not get project in one those prestigious institutes only because I did not have anyone to recommend me. I have seen my friend who dad was working in one this institute telling his son” tell me which institute do you want to work I will make sure you have a place there” this is actual scene in this prestigious institute. When you don’t even treat the present science graduates well how will the next generation who see this feel about taking up basic science. I ultimately changed my field. What was the use of my parents sending huge amount of money for my Science education. The affordable Indian go out and make there career. AT the same time if you take up engineering degree you can get into one or other IT firm and earn well, so we find parent encouraging their children to take up engineering and computer science. Instead of lashing out at IT and IT industry it is better if they start looking into improving the condition of present science graduate.

  25. Yadi Says:

    Goodness gracious we don’t have good leaders to guide the country and hence we are in such a social mess, our people are so worthless to put all forms of idiots, hooligans, law breakers and murderers in power and the result of it is we have nothing else to boast of other than the alms given by our rich cousins namely the US, EUROPE etc., we are begging alright, are our leaders thinking of how to stop begging no, they have minds as tiny as an ant and greed as big as an elephant.

    India won’t graduate soon, people will be sitting ducks against cunning political foxes and we will loose in this big social game.

    We are depending badly on all scientific information from the west and don’t look at our own backyard coz everything from the west is better, that’s what we think.

  26. suresh Says:

    But… programming are very important part of the future! Don’t believe it. I am confident that in another 30 to 50 years, highly skilled and specialized robots with AI will do the more grunt work like building home, laying roads, driving cars, buses, sweeping roads where man will only program them to do the work – I know you don’t need to program if the robo has AI but to improve his AI or IQ itself you need to do the programing. So IT will play very critical role in designing the future and INDIA will have an edge to become the super power. Oh! most of the developers in India are crap – yes, sadly it is true – yeah i am working as core developer in IT industry for 4 years. But given the IT industry is not so mature (you can’t rarely find people who has more than 10 years experience in IT), it will soon be the best in the industry in another 10 to 15 years as the current developers with 2 to 8 years experience will have 12 to 23 years of exp in IT. So, it will flourish and will be the backbone in making India a SUPER POWER.
    Also as most of the youth in USA or Europe prefer to work in super store rather than as a programmer, west will loose its programming power and will relay on India or China to do the work. Slowly India or China will rule the world – but who will rule the world only time will tell.
    I believe India is moving in the Right direction and placing most it talent on IT.
    Also I think in near future mechanical parts will be replaced by electronic parts (maybe be nano electronics) and electronic parts should be programmed – but I maybe wrong!

  27. roshan Says:

    This is bull shititng by Mr A M Naik

    If they pay salaries comparable to IT..civil engineers will gladly work for you.
    what shitty bakwaas is this.

    Nail doesn’t under stand basic demand supply in talent industry..this is just the beginning.

    what has LT done to solve the problem>

  28. twistleton Says:

    suresh buddy i hope your vision NEVER comes true. I can
    only trust that our politicians will not let that happen… Good
    grief man, let’s just kill all humans while we are at it, who needs
    homosapiens when you have AI? Matrix, anyone?

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