What happened to Indians’ IT dream?

Now the bigger question, what lies ahead for Indian IT Industry? The outsourcing and Indian IT professionals’ future is bickering. The recession in the US is hurting Indian outsourcing companies quite significantly. .
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THE IT dream is that dream of the new generation of India in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a dream of motor cars and high wages. It is a difficult dream for even upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. A dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.

Many of us pen these words in the midst of the Great Depression, the worst IT crisis in Indian history. It is timely to reflect on these words, as it appears that the dream is slipping further out of reach for most Indians. If the dream of a better life for our future generations is lost, it will truly mark a turning point for our great Republic. The reason the dream is slipping away is due to the actions of politicians running our government and bureaucrats, industrialists, IT giants running the big show. Those with ability who have earned a better life through their hard work, intelligence and integrity should be attaining a higher position in the social order. Instead, our government is rewarding those who have taken unwarranted risks, made brainless decisions, and willingly chose the course of excessive debt to climb the social ladder.

The dream was a reality for the new generation in last decade of 20th century and beginning of 21st century. The dream slipped away from Indians as soon as the American economy recession came into fore in the last Quarter of 2007. George Bush, Henry Paulson and Ben Bernanke decided to seize money from the vast majority of Americans who lived within their means, utilised debt sparingly, and worked hard to get ahead and give it to the most appalling failures in our society. They have shoveled billions to banks that operated their businesses like gambling parlors. They have shoveled hundreds of millions to people who bought houses with no money down, interest only mortgages and fraudulent loan applications. These egotists used immense amounts of short term debt to overpay for malls, office towers, hotels and apartment complexes. The rental income could never cover the interest expense on the debt. The market was flying high as the MBA geniuses on Wall Street were able to work their magic by slicing this debt into trenches, getting it rated as investment grade paper by criminally negligent

The jig is up. According to the Wall Street Journal, $160 billion of debt will come due in 2009 for America. Of course, in the America of today, bad business decisions of yesterday that enriched executives like Steve Roth of Vornado Realty and who received accolades from the business press are cast aside. Just use the ‘Too big to fail’ excuse and all is well. The Indian IT industry was also flying high with so called ‘IT boom’ with bad boys like Satyam Computer Services former chairman Ramalinga Raju making money by fraudulent manner. Now he has confessed the biggest fraud of Indian corporate history amounting to 7800 crores making 53000 employees luck tottering in balance. Now Indian taxpayer will come to the rescue. The Indian taxpayer gets punished no matter what we do. As Indians do the right thing and cut their spending, but retailers, malls, and hotels will lose money. Automakers, IT giants, developers are already asking for bailouts. Our government will take the money from the innocent taxpayers and give it to the rich negligent businessmen.

The stock market and Satyam Computer’s investors were spooked by the revelations of its promoter and former chairman Raju. It turned out that the reported cash pile on which the company was sitting was fictitious. Not only that, even profit and loss accounts were doctored to the extent that actual operating profit (claimed Raju) was around 10 per cent of the reported amount. In case of cash and cash equivalent the discrepancy was over 95 per cent. The disclosure came as a nuclear bomb and nearly wiped off Satyam’s market value in two trading sessions. What a sudden reversal for a company, which till few days ago was India’s fourth-largest IT service company. With each passing year, the situation was getting perilous and the company had to create even bigger fictitious bank deposits to plug the hole in cash flows. It was for all to see. Sadly however the market was too busy tracking its quarterly earning per share and had little time to match the three accounts line by line.

The revelation of Satyam Computer Services Ltd of about a Rs 7,800-crore fraud may dent the image of the World Bank as it kept quiet until last month about its suspicion of the IT firm’s corporate malpractices. In 2006, the World Bank told the US Justice department that it suspected Satyam might have been involved in bribery, the ‘Wall Street Journal’ reported, citing bank officials. However, in late 2007, the bank completed an internal investigation and found that Satyam had acted improperly. Under World Bank rules, the company then had the chance to argue why it shouldn’t be banned? Now that its future is uncertain and it has now plunged many other Indian Software giants together. India’s third largest software exporter Wipro joined bribery-tainted Satyam Computer Services in a club of companies barred for four years from doing business with the World Bank on charges of offering improper benefits to the Bank staff. Wipro Technologies was followed by Megasoft, the third Indian software vendor to have attracted the bank’s ire, while non-IT vendors Nestor Pharmaceuticals and Gap International and an individual Surendra Singh were the other Indian entities to have faced debarment action by the bank.

American businesses will have a very hard time trusting Indian IT companies the way they did prior to this disastrous scandal. This is high profile enough that we wouldn’t be surprised if some regulatory agency in the US took notice and made it more difficult or impossible, in some cases, for American companies to outsource to Indian software firms. The Indian news media is abuzz with the disastrous implications of the Satyam fraud; investors have lost billions of dollars and the reputation of Indian enterprise has been seriously blackened. No small potatoes. Coming to the question, was Satyam used as a tool of espionage by the Indian government to steal proprietary information from important agencies, companies and countries? This is a very, very serious issue and one that multiple institutions, including US intelligence agencies should look into. The Raju family has very deep political connections in India and may yet find a way out of this crisis. Was it really possible for multiple systems inside the World Bank, managed by Satyam, to have surveillance and espionage software installed on them without the management of Satyam finding out? And if it was, once this was discovered, why did Satyam fight the World Bank so publicly? Clearly, the decision to push back on the World Bank had to be taken at the Raju level. This company was after all a dictatorship. So Raju had to have known that a) information was being stolen from the World Bank illegally b) the World Bank now knew about it and c) that Satyam’s response - rather than cooperation - was absolute refusal to acknowledge the theft of data.

Now, the bigger question, what lies ahead for Indian IT industry? The outsourcing and Indian IT professionals’ future is bickering. The recession in the US is hurting Indian outsourcing companies quite significantly. Come to think of it, the involvement of a leading businessman in acts of global espionage would not be a first. And the fact that indian outsourcers have their tentacles deep into western businesses do make them a very attractive source of information on other governments and citizens across the globe. Any adverse development has an impact on corporate India and India as a country. It is imperative that the Satyam newly formed board’s actions in the next few days restore the confidence. Far beyond Satyam, it raised fears that similar problems might lurk in other Indian companies, particularly in its vaunted outsourcing industry.

British daily the ’Financial Times’ said: "Its (Satyam) disclosure will ring alarm bells for hundreds of Fortune 500 companies across the world that entrust their most critical data and computer systems to Indian outsourcing companies and threatens to damage the country’s reputation as a place to do business."

The new board of Satyam, however, says that we have done enough communications and will continue to do so with all key stakeholders to reinforce their confidence in us. Such incidents are not uncommon -- Worldcom and Enron being much publicised cases in the Western world. While a fall is unfortunate, it is the speed with which we pull ourselves up and continue to move ahead is critical. The quick actions taken and the impeccable reputation of the industry over many years will reinforce the faith of the world in us.

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BY ENGINEER ZAKIR HUSSAIN
Source：merinews