IT Sector not contributing to Indian Economy - AM Naik“Infosys is so focused on making 26% profits, their India revenue is less that 1.5%. So India doesn’t benefit with its own people. This makes me angry. Now they say they are looking at India and China, forced by their profitability issue. Not because they have any love for our country! ” -AM Naik, CMD of L&T
The IT sector is extremely upset with AM Naik — the CMD of L&T, India’s biggest infrastructure and engineering company, for making a statement against the Information Technology companies of not contributing to the national economy.
AM Naik, CMD, L&T said:” Please find out whether Infosys does any Indian work. They are so focussed on making 26% PAT. I think some days ago they said that they will now focus on India and China. So far their revenue in India was less than 1.5%. So India doesn’t benefit with its own people. This is really my anger.”
Reacting to Naik’s statement, the IT companies, meanwhile, have expressed anger over the remark made by a chief representative of an old economy company. Especially, the IT bigwig — Infosys — which was targetted and singled out with the criticism, has reacted with particular aggression. The company’s Director, Human Resource — Mohandas Pai — reacted to the statement made by Naik and categorically said that had it not been for the IT sector, India would have had to pawn its gold once again like it did in 1991.
Meanwhile, other IT bigwigs too reacted very strongly. Echoing the sentiments of Mr Pai, Girish Paranjpe, President, Wipro said: The IT sector has given workers a global exposure and offers great career opportunity to millions of Indians.
Naik is upset with the ‘Bangalore club’ as he prefers to call Wipro, Infosys and the slew of other IT companies. He despairs at the way they hire engineers to write code and alluded to their grouse of poor infrastructure in Bangalore as a creation of their own making.
Who asked them to hire civil engineers and mechanical engineers? he asked. BComs and BScs would suffice for writing code, he says.
The least that the politicians can do is to stop cutting ribbons in the outsourcing industry. There are more than 75,000 engineers working on design in India for foreigners.
They are the brains, and there are 1,50,000 other engineers working in the IT industry, who are non-computer science engineers. Then the Bangalore club complains that the infrastructure there is cracking.
Who asked you to hire 1,00,000 engineers and bring them to Bangalore? Secondly, who asked you to recruit civil engineers? There are no civil engineers available to build infrastructure.
His other interview is available at the link below :This life is reserved for L&T
‘This life is reserved for L&T’ - Satish John
Thursday, November 15, 2007 03:58 IST
This is the irascible A M Naik’s eighth year at the helm of India’s most valuable engineering and construction company, Larsen and Toubro. In a freewheeling interview, Naik talks about the journey taken so far, and the one ahead, in a three-hour conversation with Satish John.
Excerpts:
L&T’s core businesses have hit a sweet spot?
All my businesses are core. What was not core we sold. And the so called non-core businesses we have, will go eventually. But all the new verticals that we are forming are in the core businesses.
L&T will have 12 verticals, including engineering & construction, power and hydrocarbons, electricals, machinery business, industrial products, heavy engineering, technology and ship building. Thus nine of the verticals are mature businesses. Two are part of our mid-term and long-term strategy.
We have not given L&T Finance a status of a vertical yet. This business is a five year play which could turn out to be very important. Beyond 2011-12, these 12 verticals could go to 14 or 15, and then we will stop.
About 3-4 years ago there was a cover story in Businessworld that said L&T would be India’s GE? Is it a fair surmise?
I don’t think they said that. They only said that my style of working was like Jack Welch (legendary GE Chairman).
We have a GE type character -a conglomerate style of doing business. We are engineering driven after we sold our cement business. We (GE and L&T) don’t have anything much in common except electrical switchgears.
GE also has finance…
Our finance business is puny. We pushed our finance related businesses only in the last three years. One company does financing and debt, and the other invests in infrastructure projects by picking up equity. It is currently doing more than 20 projects. We have investment in Bangalore airport. We have investment in Kakinada port, several roads and properties.
Like Welch, you personally pitch for business from big clients?
I have done roadshows with 20 customers because L&T wants to become a Rs 50,000 crore ($12 billion) company in 5 to 6 years. If you want to bag huge projects in the private sector they go by faith and not tenders. Like the Delhi airport did not go for competitive bidding. It was their belief that only L&T could deliver. (The day after the interview, L&T also bagged GVK’s second Mumbai airport project.)
Otherwise you bring a multinational not used to working in India. In Hyderabad, Grandhi Mallikarjuna Rao (founder chairman of GMR Group) experienced it. We were only constructing there, the rest of the work was done by a multinational. They ran away or whatever. The promoters obviously didn’t want to repeat it again and so we got the order in Delhi.
We are bidding for huge power projects. In the next 5 years we want to develop turnkey projects of 8 mw to10,000 mw. That’s why we have the Mitsubishi joint venture for a super critical boiler plant. Our turbine joint venture is a toss up between Toshiba and Mitsubishi. (A week after the interview Mitsubishi was finalised.)
