A Better India, A Better World by N.R. Narayana Murthy; Penguin Books; Price: Rs.499; 290 pp
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A welcome fallout of the partial liberalisation and deregulation of the Indian economy since 1991 is that industry leaders, who once upon a time were mortally afraid to air their views on politics and economic policy, have begun to speak up in public forums and pen their points of view in autobiographies and the media. This socially-beneficial trend was initiated by the late Prakash Tandon, the first Indian chairman of Hindustan Lever (now Unilever India), who wrote a marvellously fluent three-volume autobiography (The Punjab Trilogy) to emerge as perhaps the first (mild) critic of licence-permit-quota raj which mired post-independence India in the Hindu rate of growth (3.5 percent per year) for three decades, and transformed Mahatma Gandhi’s dream of a morally upright independent India, into one of the world’s most corrupt societies.
However following the global success of Tom Friedman’s seminal The World is Flat (Penguin Books, 2005), which detailed the newly-emergent phenomenon of globalisation — and the major role that India is all set to play within the rapidly globalising world economy — it has become a fashion for industry leaders to switch from writing their memoirs to charting courses for national economic growth and development.
Late last year Nandan Nilekani, co-promoter and hitherto managing director of the Bangalore-based wonder corporate Infosys Technologies Ltd (sales revenue: Rs. 23,315 crore; no of employees: 104,900 in fiscal 2007-08) wrote a 531-page prescription for India’s healthy growth and development titled Imagining India. Although the book contained numerous illuminating insights, it belied its promise because it was a national prescription based upon an incomplete diagnosis, and sacrificed depth of analysis for breadth of coverage. Now perhaps in a spirit of friendly (and certainly refreshing) competition comes the evocatively titled A Better India, A Better World, penned by the undisputed originator, guiding spirit and incumbent chairman of Infosys, N.R. Narayana Murthy.
Undoubtedly, Murthy is well-qualified to write a prescription for national development. Over the past quarter century plus, since he and a bunch of IIT graduates working with the Mumbai-based Patni Computers broke away to promote Infosys, he has been the prime driver in the growth, development and transformation of this IT software development and consultancy company into a model transnational corporation, with largely satisfied clients in 27 countries around the world. As the promoter chairman and chief executive of the company for several decades, Murthy introduced and assiduously implemented best global business practices such as timely delivery, international benchmarking, and client-centric services which have won Infosys huge contracts, numerous awards and the endorsement of investors in India and abroad, as testified by the consistently high valuation of the company’s equity shares on the Bombay and New York (Nasdaq) stock exchanges.
Therefore having “walked the talk” — a phrase which is ubiquitous in this compendium — Murthy is competent to comment on issues of corporate and institutional development. Moreover because Infosys is a high-end skills marketing company which employs the country’s best engineering and technology graduates, he is also well qualified to speak intelligently about education and related issues. Plus because Infosys is an outward-looking multinational company with 90 percent of its revenue earned abroad, he has also acquired valuable knowledge and experience of the newly emergent flat-world, global economy.
Consequently while quite a few chapters of this book are made up of exhortations, homilies and platitudes, which admittedly bear repetition, they are inter-mixed with others which offer brilliant insights. Among them: two chapters (speeches) in part III of the book which highlight “important national issues” on population and economic development (where Murthy evidently differs with his colleague Nilekani), and on the importance of detailed urban planning. Also brilliantly expounded are the author’s recommendations on reform of India’s moribund higher education system (p.132).
Yet the chapters which proved to be of greatest interest to this reviewer are contained in part VI of this collection of speeches in which Murthy outlines his views on “compassionate capitalism” and laments the lack of a philanthropic culture in Indian society. Citing a survey which indicates that while in the US, over 80 percent of all households donate to charitable causes, in India high-income households give only 1.7 percent of their income to philanthropic causes, much less than their Indonesian, Thai and Filipino counterparts (around 6 percent), Murthy ascribes this miserliness of the Indian rich to a deep-seated belief among the native population “that social issues were the responsibility of government alone”.
The author’s observations and remarks contained in these two chapters have a hollow ring and smack of hypocrisy. Of necessity, they bring to mind the miserliness of India’s high-flying IT companies and their promoter entrepreneurs. For unconvincing reasons the country’s highly valued IT companies, whose equity shares are quoted at dizzy prices in the stock exchanges, are exempt from paying tax on income earned abroad, which is over 80 percent of their aggregate revenue in most cases. Nor are the dividend incomes of IT tycoons taxed in their hands. Every year IT companies save thousands of crores because of this unwarranted tax break. For instance, in 2007-08 Infosys reported a net profit of Rs.4,659 crore, on which normatively it should have paid income tax of Rs.1,537 crore.
The privileged status of the IT sector is particularly galling because, with their huge work force of relatively well-paid techies, they have imposed great strain on the infrastructure and living conditions of host cities such as Bangalore, Hyderabad, Chennai, and Gurgaon among others, driving up property prices and stretching civic services. Yet you’ll be hard-pressed to find a public library, world class school or university established by an IT company.
The plain truth is that India’s new genre of IT tycoons are only marginally better than the country’s traditional moneylenders who give capitalism a bad name. Although they have learned the basics of information technologies from the Americans, they have yet to learn real philanthropy from them. In short, the weight of available evidence is that neither Murthy nor any other icon of the over-blown IT industry is ready and willing — even though they are more than able — to walk their talk. Meanwhile, with the income tax exemption granted to IT companies due to end this year, lobbying for its extension has begun. Continuation of this favoured status must be strongly resisted by public opinion.
Dilip Thakore