Infosys Technologies co-chairman S Gopalakrishnan took over the helm of the Confederation of Indian Industry (CII) this month. He spoke to ET’s Vikas Dhoot and Shelley Singh about the challenges ahead for India’s investment climate and though he didn’t discuss Infy’s latest quarterly results, he did say that the IT sector needs to evolve new models. Excerpts:
You take over at a time when elections dominate the political economy while the investment climate is bogged down in policy suspense and a high current account deficit.
The number one priority is to get growth back to 8-9% as soon as possible. We want to present to each of the major political parties our requirements and suggestions in their election manifestos. We are preparing a white paper to be submitted to each party. We also want to create a platform for major political parties to interact with our members so that we can also understand what political parties want.
Would such a platform work, given the mistrust that has crept in after CAG reports flagging widespread crony capitalism?
Yes, there is mistrust in leadership, in all forms of leadership. It’s not unique to India and is being caused by the shift of power into the hands of the individual (through social media).
On crony capitalism, industry has a clear role to play in getting policies and implementation right, and adhering to an ethical code of conduct. Corruption is a societal problem. There are multiple reasons and people involved, and we have a past history of a certain kind of governance in the country.
Most people don’t wake up in the morning and say whom can I cheat today. So we need to create an environment in which business can be conducted legally. In most developed countries, such issues related to businesses involve civil actions, not criminal actions.
The Centre had promised a clean-up in natural resources’ allocation, ministers’ discretionary powers and public procurement. Have these promises been met?
It’s like pushing a large rock up the hill. Tremendous effort is required to push it till the top after which it rolls down the other side. When you push it up, sometimes it rolls back and kills you. Till it reaches a tipping point, progress will be slow and sometimes, we will take one step forward and two backward. I see an increasing impatience about this and a lot of public awareness has been created through movements like Anna Hazare’s, which is good.
Apart from ministerial discretion, investors are now wary of the taxman on issues such as transfer pricing.
At the highest level, the awareness is there, if you look at the finance minister’s statements in the last six months and actions. So they know that this is not improving the climate for investments in India. From there to implementation, there is often a significant gap. Today, whenever a policy is proposed, we flag the arbitrariness involved. Many a times, we get it corrected. Sometimes, we don’t.
In India, unfortunately, we have the policy document and the law. But there is an aggressive or lacklustre implementation of this. They say, let the courts decide what is right and wrong, which would be okay if the courts decided next week and its verdict became the norm.
What are the growth prospects for the IT services business?
On individual companies, I can’t comment. I will go by what Nasscom says (12-14% growth). In the long term, I am very optimistic for the sector. India can gain a lot from this sector. We have to unleash the creativity and imagination of our young workforce. This can happen via incubators and start-ups that could eventually create large companies. Every day, I am amazed at something new that has been done in technology.
We need a start-ups revolution to tap that power. I firmly believe IT will continue to create jobs, but it will be a different way of creating jobs. New models will evolve and these will create new types of jobs. It will be different from the IT services business we have seen in the past.
The government has warned India Inc about a law to enforce job reservations in the private sector, since its affirmative action performance hasn’t been up to the mark. How worried are you about this threat?
We have to work together. Anything that is imposed like this can backfire. Is there a need to do more? Yes. Are we going fast enough? No. There is a realisation, but individual companies have to do things. There are multiple, complex issues such as the poor quality of education or skills. That is why growth is the answer as it will create demand for all levels of workers.
We also need to focus on ease of doing business and the infrastructure deficit. The commutes in our cities are so bad that by the time people reach their office, they are angry and cursing everybody and are tired already. How good a worker can you be then?
source : http://timesofindia.indiatimes.com/