Infosys’ run-in with the government over the malfunction of a newly-developed Income Tax e-filing portal is only the latest in a series of such disputes the company has had over a string of high-profile e-governance portals. And just like Infosys non-executive chairman Nandan Nilekani was called in to answer for the shortcomings in the income-tax portal, the government had almost in an exactly similar fashion hauled up the company for consistent problems in the projects involving the GST Network and the MCA21 portal, for which the then CEO Vishal Sikka had to offer an explanation for the glitches in Ministry of Corporate Affairs’ project.
Prior to getting the contract to develop and manage the Income Tax portal, Bengaluru-based Infosys had been appointed by the government and its agencies for a number of flagship IT projects — including the $50 million contract to implement the Ministry of Corporate Affairs’ MCA21 v2 portal, and a Rs 1,380 crore contract to develop the IT backbone for the Goods and Services Tax Network.
In all of these three major projects, Infosys’ products saw performance issues. Government sources said Ministry of Corporate Affairs faced major issues in the rollout of version 2 of its MCA21 portal by Infosys in March 2016.
“We had faced serious issues with MCA21 version 2.0 in the first 6-8 weeks after the rollout,” said a government official, noting that the corporate affairs ministry had written to then CEO Sikka to explain reasons behind the faulty 2016 rollout and had even reduced the payment made to Infosys.
Sector experts pointed out that for Indian software companies, while government projects are usually smaller in revenue generating opportunities, they are essential to maintain domestic visibility.
The official noted, however, that the performance of the portal was smooth post the initial teething period and that the service period for Infosys was extended by one year to July 2020 after it completed its 6.5 year service agreement in mid-2019. Infosys did submit a technical bid to continue as the vendor for the MCA21 portal, it failed to submit a financial bid within the deadline stipulated by the MCA. L&T Infotech emerging as the successful bidder to take over the operations of MCA21 in 2020 and launch the new version of the portal set to be rolled out this year.
The first phase of the rollout of MCA 21 version 3.0 which included a new website and online consultation on legislation was launched in May.
Similarly, for the GSTN project, even though performance issues with the platform developed by Infosys that had occurred early during the rollout were resolved, other glitches continued to surface even as late as March last year.
In March 2020, the Finance Ministry wrote a letter to Infosys pointing out the technical glitches faced during peak filing hours of GST returns and the “tardy” progress of resolution despite repeated concerns.
Infosys did not respond to specific queries sent by this newspaper pertaining to the consistent trend of glitches developing in the high-profile government projects being handled by the company.
Prior to getting the project to manage integrated e-filing portal for the income-tax department, Infosys had been managing the Centralised Processing System for the tax department, while TCS operated the front-end portal of the income-tax department. TCS has also been managing the Ministry of External Affairs’ Passport Seva Kendras, while HCL Infosystems was contracted to build and operate the IT backbone of the Aadhaar project. In 2016, the income-tax department’s Rs 1,000 crore contract to build and operate Project Insight — for helping the department profile all taxpayers and flag high-risk individuals — was awarded to L&T Infotech.