In the recently concluded march 31 fiscal year, the Bangalore-based IT and ITES (IT enabled services) blue chip corporate Wipro Ltd earned a handsome net profit of Rs.3,283 crore on a gross sales revenue of Rs.19,975 crore. Little wonder that Wipro’s equity share (Rs.2 paid up) is riding high, currently quoted at Rs.458 on the Bombay Stock Exchange and Azim Premji, the promoter-chairman of Wipro who owns 86 percent of the company’s issued shares, is arguably the wealthiest individual in the subcontinent.
Yet apart from being famous for being wealthy, Premji is also lionised by the media as a champion of primary education. The IT billionaire reportedly donates sums variously estimated by media reporters at Rs.20-50 crore per year for primary education causes through the Azim Premji Foundation (APF) and the Wipro Applying Thought in Schools programme.
Premji’s championship of foundational primary education, and his funding initiatives even if modest, would be commendable, except for the fact that on the net profit of Rs.3,283 crore earned in 2007-08, Wipro won’t pay a penny as corporate income tax. For mysterious reasons IT companies have been exempted from corporate income tax for over two decades until 2010. If Wipro had not been an IT company, it would have had to pay Rs.985 crore as income tax in the recently concluded fiscal year. Nor since dividend tax is payable by the company, is Premji liable to pay income tax on the massive dividend income (Rs.696 crore) which accrues to him as the owner of 86 percent of the equity of Wipro.
In the circumstances, given the huge tax breaks he enjoys, one would have expected this vocal children’s education champion to be far more generous in the matter of equipping abysmally provided government schools with computer hardware, libraries, laboratories, lavatories etc. But one would have to look with a powerful magnifying glass for evidence of such generosity. For the past 18 months EducationWorld has been requesting the company for copies of the annual reports of the APF and WATIS programme, without success.
Quite obviously despite the huge tax breaks he enjoys, Premji’s philanthropy is in inverse proportion to his rhetoric and the numerous encomiums conferred upon him by the gullible media. Disclosure: Three years ago Wipro cancelled a Rs.1.14 lakh per year contract under which 500 copies of this publication were sent on the company’s behalf to headmasters of cash-strapped government primaries to keep them updated about education news and trends. Financial constraints, explained Vijay Gupta of Wipro corporate communications.