The top managements of the country’s booming IT (information technology) software services and development companies — including heavyweights such as TCS, Infosys, Wipro and Cognizant which have attained blue-chip status of the stock markets and claim to earn over $55 billion (Rs.247,500 crore) by way of hard currency revenue annually — are in a tizzy over an income-tax department demand notice issued last month (January) to Infosys Technologies Ltd (aggregate revenue: Rs.22,742 crore in fiscal 2009-10). Belatedly as usual, the babus of the income-tax department have discovered that Infosys has been sending Indian citizens abroad to provide onsite services to offshore clients i.e ‘body-shopping’. According to suspect interpretation of law by the department’s babus, income thus received by the company is not earned from exports of goods and merchandise, and hence is taxable.
Even if the department’s argument for bringing Infosys and IT companies in general into the tax net is suspect, there’s an emerging consensus that it’s high time the corporate income-tax exempt status of IT companies which costs the Central government over Rs.20,000 crore annually in foregone revenue, is ended. Indeed N.R. Narayana Murthy, the voluble chairman of Infosys himself suggested some years ago that the income-tax exempt status of the larger IT companies needs to be revoked. But since then he has been mysteriously silent on the issue.
Now with the income-tax exempt status period of IT companies all set to end this year, India’s most powerful industry lobby — the Delhi-based NASSCOM (National Association of Software and Services Companies) — is networking furiously in the national capital for establishment of tax-exempt Special Economic Zones (SEZs), to which the IT companies will move their largest offshore accounts to continue to enjoy tax exempt status.
Meanwhile to fund its scams-ridden giveaway projects such as MNREGA and other social sector schemes, the Centre will continue to raise indirect taxes on petroleum products. Doesn’t seem right, does it?
Corroded steel frame
There’s a serious — perhaps terminal — morality crisis within the 4,572-strong Indian Administrative Service (IAS), once described as the steel frame of public administration in India. While retired IAS officers are a regular feature on television chat shows in which they routinely express righteous indignation about the state of the nation and depredations of politicians with whom they were hand-in-glove until retirement, their contention that there are only a few bad apples within this fraternity who are giving the service a bad name, is doubtful. The sheer callousness and incredible venality of the husband-wife duo Arvind and Tinu Joshi — both IAS officers — currently in judicial custody for possessing assets valued at Rs.360 crore including 25 residential flats and 400 acres of land across the country, raises the scary question of whether there are only a few bad apples in this close-knit mutually supportive fraternity, or whether the IAS has gradually morphed into the country’s most powerful mafia clan.
To describe this IAS couple as bad apples would qualify for the understatement of the year. The disgusting truth that’s emerging is that Tinu Joshi accumulated a sizeable proportion of this fantastic loot while serving as secretary in the ministry of women and child development by defalcating funds allocated for malnourished mothers and infants suffering prolonged ill-effects of the 1984 Bhopal gas tragedy, the world’s greatest industrial disaster. Nor are these worthies common and garden variety state bureaucrats. Arvind Joshi had served in the prime minister’s office and in the defence ministry during the Kargil War (1999) when several defective materials scams were unearthed.
Yet while former and serving IAS worthies would argue that the Joshis are not representative of the service, the point is that they could not have plundered the public exchequer on this vast scale without the collusion and connivance of other members of the Central services — the Indian Police Service, Indian Revenue Service and IAS — who head all the important ministries at the Centre and in the states. The unvarnished truth is that even the good apples of the services by turning a blind eye while this IAS duo ran amok, are complicit. Cry indeed, beloved country!
Comeback time
A former editor and engaging columnist who has gone deep underground following the exposé of several journalists when authorised phone taps by the income-tax department of public relations diva Niira Radia were leaked to the mainstream media in end 2010, is Vir Sanghvi. Since the leaked Radia tapes outed him as a political broker and propagandist of industry tycoon Mukesh Ambani, Sanghvi has disappeared from mainstream media, avoids the public spotlight and the red carpet.
Yet if now this once bright meteor of Indian print journalism who won encomiums as editor of Sunday and the Hindustan Times, both of which he transformed into widely respected, front-rank news publications, is a penitent in sack-cloth and ashes, not many tears — except perhaps his own — are being shed. Because over the years since Sanghvi began his innings in Indian journalism as editor of Bombay, the country’s first city magazine in the early 1980s and particularly after he migrated to Delhi towards the end of the decade, he morphed into a typical kiss-up, kick-down scheming courtier of the Delhi durbar.
Your correspondent, as editor of Businessworld, introduced him to media mogul Aveek Sarkar who was sufficiently impressed with him to appoint him editor of Sunday. But in the new millennium as editor of this then struggling monthy, I vainly sought an appointment with Sanghvi to introduce me to Shobhana Bhartia, the imperious publisher of the Hindustan Times. Despite numerous requests by phone, fax, e-mails etc, Sanghvi — or specifically his secretary — denied your editor audience or hearing. Now nemesis has caught up with him, hastening his descent into effete epicureanism.
Nevertheless there’s no denying that the public interest is diminished by this accomplished and insightful political analyst and columnist having taken purdah. Barkha Dutt, the other journalist outed as a political busybody in the Radia tapes has put it all behind her and is back charming all and sundry on television. Sanghvi needs to do likewise.