Reality Check India

Murthy on Devils Advocate

Posted in Uncategorized by realitycheck on January 6, 2007

I cant wait to see this interview. The “Chief Mentor” of Infosys, NR Narayan Murthy is going to be on Karan Thapars “Devils Advocate” on Sunday, Jan 7 at 20:30 hrs (IST) on CNN-IBN. Link here


Reality Checks’ only question for him would be.

So, Mr Murthy – when is the tax holiday ending for the Indian IT industry ? You see, we are a poor country. We need your tax dollars for roads, schools, crushing terrorism in Assam.

If IT services companies do not pay corporate taxes (excise and customs too) like others, we will have UNICEF and other bodies mocking us openly about child malnourishment. Sir, we want to avoid that, dont we ?  

Please request Nasscom not to lobby for more tax holidays via the SEZ route or extension of STPI holidays. Our politicians are weak kneed and will easy succumb to such high flying sophisticated lobbyists like Mr Karnik.

In a country like India, privatization is not the answer to everything. As we can see with the IT industry and the SEZ policy, private players quickly organize themselves into special interest groups. These groups then go on to create special privileges for themselves – such as tax holidays – SEZ units. This kills competition which you so crave for.  Perhaps you may not be aware of Mr Friedmans buddy, Mr Mancur Olson, warned about such special interests.

We need tax money so we can create “public services” for all Indians to enjoy. Tax money cannot be used to create “private services or comfort zones” and then use these services as a leverage against smaller competitioin.

More after the interview.

14 Responses

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  1. vatsan said, on January 6, 2007 at 1:28 pm

    i want to ask him if infy is a IT firm or a real estate company, considering the acres of land they are sitting on or are planning to acquire at throw away rates. they could make a killing by just procuring land at subsidised rates and selling it at market rates, therefore i wonder if infy has decide to diversify into the real estate business 😀

  2. Reason said, on January 7, 2007 at 9:48 am

    Narayana Murthy has thought about this already. He is a capitalist in mind and socialist at heart.

  3. Brahman said, on January 7, 2007 at 4:25 pm

    I think with the onset of private sector reservations, first for SC/STs, Infosys and others are justified in asking for tax concessions. Being nothing more than staffing agencies, it is really the taxes paid by their hard working employees which are being used for the social engineering programs that the politicians trumpet for votes. So the only way out is entrepreneurship for the smart ones among the employees. Every employee must diligently acquire contacts during their tenure with these staffing agencies, and then leverage those to start their own contracting agency.

    It would be one way to escape the effect of private sector reservations, which will vitiate the atmosphere in many companies once it comes into existence. The other way of course is to get politically organized and vote as a single-issue votebank. This will definitely get the politicians’ attention.

    Private sector reservations will not be easy to apply to small companies (number of employees less than 500), because there is no way the Gounders, Mudaliars, Chettiars, Thevars etc in TN for example will hire SC/ST employees, or give up management control of their family businesses to SC/ST managers. Unlike Brahmans, they are not a soft target, and politicians will be very wary of arousing their ire.

    I am not really sure where the country is going with all these divisive social engineering programs. As caste and language chauvinism strengthens in each State, will India still be a single nation by the end of this century? I think this is a question worth pondering by all.

  4. Brahman said, on January 7, 2007 at 4:36 pm

    I am also curious if there are already analysts in think tanks around the world thinking about such scenarios where India is no longer a single nation. If India were to be broken up into multiple nations, what would be the makeup of the resulting nations? Sixty years ago, the nation was split into two along religious lines. Sixty years hence, how many more nations will arise from the current India? Will the divisions be along linguistic lines, or caste? Why do we try so hard to be one giant nation? In the long-term, is a giant nation of 1.7 billion workable?

    What is interesting is that in the latter half of the last century, we have an example of a large nation breaking up along linguistic and ethnic lines (USSR), and an example of a group of nations with differing ethnic and linguistic populations deciding to join together into a single entity (European Union).

  5. enewss said, on January 7, 2007 at 4:55 pm

    I lost respect for narayana murthy long time back when he openly criticized politicians. I had authored a blog on that topic on indiatimes and luckily it was featured on their front page. I received several hostile comments to delete the blog entry and apologize. Even though no one presented a strong basis as to why i should apologize.

    This guy (read narayan murthy) is at best a preacher. He just preaches and does nothing. He talks about corruption and yet his company sales team scouts around paying bribes to grab the projects.
    They talk about poor and still grab acres of land from government at throw away prices.

    How can then the country will propser?
    Why did not karan thapar countered NRN about these?
    Iam really pissed at this guy who openly criticizes politicians.
    Why don’t he join politics instead?

    Best regards

  6. Barbarindian said, on January 7, 2007 at 10:26 pm

    I am also curious if there are already analysts in think tanks around the world thinking about such scenarios where India is no longer a single nation.

    Glad to learn that the idea is gaining traction. I have already blogged about this and very curiously on the train an Indian dude said the same thing.

    Hope this time around they do the right thing and not create so much chaos and bloodshed. Heck, it could be in the model of European Union 🙂

  7. Brahman said, on January 8, 2007 at 2:43 am

    I think the concept of India as a single nation will become increasingly strained with every passing decade. Unlike the Han-dominated Chinese, who are a somewhat homogeneous group, India is a diverse mixture of groups split along ethnic and linguistic divisions that will become increasingly unwieldy as Indians collectively attempt to become No.1 in at least something (population).

    My thinking is that the likely partition is going to be: South India (TN,Andhra,Karnataka,Kerala, parts of Maharashtra), NorthEast (Greater Assam), North India, GreaterKashmir, and a separate nation of Dalitstan in parts of AP/Chattisgarh where a Naxalite movement is active.

    I honestly believe India is getting too big to govern as a single nation, and the increasing Naxal activity, chauvinistic mindset, casteist divisions are a symptom of this problem.

    In the south, Brahmans and a few others have already started migrating to cities like Chennai and Bangalore, and also to North India. This movement may accelerate in the coming decades. Similarly, with the impending formation of Telengana state by the Naxals, and Chattisgarh by the tribals, it can increasingly draw in Dalits and STs who are truly oppressed in South India and also in Naxal areas of Bihard/Jharkand and southern UP.

    The NorthEast is already isolated, and as mainstream India gets caught up in its own divisions, the ULFA/Bodos and others may finally to take matters into their own hands and step up calls for a GreaterAssam nation.

    Most Muslims from UP/North may choose to go to Greater Kashmir if it becomes independent, since many Muslims may be wary of Pakistan and Bangladesh. A UN monitored resolution may find most Muslims opting to secede from both Pakistan and India.

    That leaves the North. I believe a reconciliation will take place among the OBCs and other castes. The unknown variable will be the Sikhs, who might opt to stay with North India out of a need for some security because of the presence of GreaterKashmir and Pakistan. North India will also gladly welcome them since they do constitute a disproportionate share of the current Indian Army. It is worth noting that the reduced North India will still have a formidable population of almost a billion, but with the powerhouses of Maharashtra, Gujarat, Delhi and the natural resources of Bihar it can put its backwardness behind and shine. Also, Hindi will become the official language, and the local dialects like Gujarati, Marathi, Bengali, Bhojpuri, Punjabi etc be eventually linguistically borrow enough from Hindi to become even more similar. English will be discouraged, and Hindi may get resanskritized.

    The above are just a few of the scenarios possible. I am wondering if others are interested in joining me in writing a white paper on the above topic, and eventually a fictional book about India in the latter half of this century.

  8. Trivia said, on January 8, 2007 at 8:11 am

    Yes, absolutely right. Tax money is urgently required for India. Also very much agree with the line “privatization is not the answer to everything.” Let’s wait and see what Mr. Murthy will do. Anyway, thanks for such a nice and important posting.

  9. Reason said, on January 10, 2007 at 3:51 pm

    so, they made sure you dont have to trouble yourself? 🙂

  10. Barbarindian said, on January 10, 2007 at 10:19 pm

    Read the transcript, that question wasn’t raised. Mr Murthy wants to enjoy the best of capitalism and socialism. He wants to enjoy all the anti-competitive measures as well. Good for him I guess.

  11. rc said, on January 11, 2007 at 6:27 am

    His interview was of such low quality that I did not feel like panning it. His praise of Manmohan Singh and the Congress Party should be an eye-opener for educated people. He called Manmohan “the great leader around who people feel an inch taller”, then goes on to claim Singh is hobbled by a coalition. Doesnt he know that “great leaders” build consensus ? Ronald Reagan was one, I believe AB Vajpayee was another. It would have been childs play for Vajpayee to give in to Ramdos and Karunanidhis demands for an unmonitored quota for wealthy people with no social basis. The same guys were in his cabinet too. He knew which forces were divisive and which were social justice.

    I also appreciate the fact that during the NDA regime many tax notices were served on these IT companies. Faced with a giant lollipop of IT holidays extending beyond 2009 via the criminal SEZ act or via extension of STPI, he now praises the rulers.

    This is it baby, everything in India comes down to the unspoken. In this case, everything comes down to tax holidays. If Chids (who I believe is against extension of tax holidays) comes down hard on these fat cats, watch how they turn around.

    About his views on privatization of education. No thank you sir. I prefer the government handling it rather than hand it over to the likes of the “IT czars”. If any IT honcho has the right to talk about education it is Mr Shiv Nadar. He has opened a fine college in Chennai, providing quality education to thousands of youngsters.

  12. Reason said, on January 11, 2007 at 7:11 am

    Shiv Nadar’s college – which college is that?

    btw, this Nadar may be onto some fine service, but the tamil nadu government still wants to call him backward and give his descendents (bless them) reservations.. because there is no creamy layer, you see.

  13. rc said, on January 12, 2007 at 5:27 am

    HIs college

    Virtue is an individual trait – not that of a caste or a group. There are tons of brahmans who lie to the US consul that they will come back to India while applying for a student visa. Can we hold that against the entire group ? No !! Human beings (irrespective of groups) take advantage of whatever opportunity is available in a dog eat dog world.

    To me, Shiv Nadar passes the test as an individual. It would have been easiest for him to mouth off gyan like other “IT Czars”, while doing zilch on the ground. Fact is, today this college is highly respected and has provided opportunites to thousands of students. This opportunity would not have existed if not for his initiative.

  14. INI Signal - » Surely you jest… said, on March 22, 2007 at 10:47 am

    […] Our country pays price for such muddled thinking, that is usually the result when you have a capitalist mind and a socialist heart. […]

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