‘IT sector is shining brighter than other industries and would continue to do so’

The economy itself has a lot of problems,with the capital goods industry continuing to see a significant slowdown. In the infrastructure sector,the slowdown is significant and the recession might linger on for longer. Unless we see some solid reforms on the ground,which one hopes would happen in the next six months or so,we are in for a prolonged period of the slowdown. IT will grow,with the industry generating 1.5 lakh jobs this year as well as next year,but it would be very difficult to find placement for everyone. Though the land acquisition Bill has been cleared,labour reforms remain a major stumbling block in the growth of the economy.

Nanda Kasbe: What has been the effect of the slowdown on the industry? Did you have to go slow on hiring,or were the orders slow to materialise?

We as a company had never had to resort to laying off people,except right in the beginning,just after the dotcom slowdown. I had to ask 120 people to leave. Since then,we have never had to resort to that. Our growth since then has been consistent and at times we have grown more than the industry at large. Of course,if people did not perform,we had to ask them to leave. But layoff for the sake of slowdown never happened. I think we had the right mix,which made us click. Even when we were a small company,a lot of people asked us about our foray into many segments. (But) it is because of this that we are still in business. We do a whole gamut of services for some of our bigger clients. Having a good basket of services and a good list of customers have helped us mitigate the effects of recession.

Partha Sarathi Biswas: You spoke about the positive effect that Narayan Murthy’s return has had on Infosys. However,the quarter results were not as good as they were expected to be. How long do you think it would take the company to come back to its previous position. Also,where do you see the business coming from in the future?

Come on guys,give him some time! Given the market conditions,the profit margins are quite good. On the broader prospective,do I see a 20 per cent growth in the industry in the next few months? The answer is no. I would expect a 10-15 per cent growth over the next four years. If we look at NASSCOM projections,we will see the industry size to touch $240 billion by 2020. If we do the calculations,it would translate into a growth rate of 13-14 per cent over the next seven years. I think,to be realistic,we can say the industry would grow by 11 per cent on an average. But the phase of 20 per cent growth would not be realised. This is a very mature industry and it would grow.

India’s share in global business has increased by two per cent in the current slowdown year. If we were not that efficient,obviously we would not have got business. Philippines is next to India in terms of global business share. The call centres in Manila are set up by Indian companies. The hype in media about issues related to the industry has acted as a dampener for many companies setting up business in the country. In Manila,which faces floods often,you would find BPO employees rowing to office. Company buses,cabs and other such perks are not there. So,many of the companies prefer setting up base there. In terms of a large number of people doing fairly value added stuff,I think we do not have any competition. However,for smaller work,the competition is rising.

In order to take on the competition,we have to develop many more industrial centres in the country,which would see growth. Interestingly,now people don’t want to move to big cities but want to stay in tier-II cities. This is a fantastic thing for development. However,for the industry to go to tier-II cities like Nashik and Kolhapur,there should be proper infrastructure to grow,which the government has to provide. All kinds of infrastructure,such as digital and social,have to grow to accommodate the growth of the industry. In China,when cities grow,airports are the first to grow. We need to have that pattern of growth across the country to help decentralisation of the industries. If the government takes a larger view of this,it would translate into growth all around.

I think with a large population like ours,we can continue to remain competitive,provided concerted efforts are made.

Nanda Kasbe: Do you see that concerted effort happening all around?

I think it is,but the pace is very slow. I do not want to sound political,but somebody was telling me the other day that UPA would probably come back. The simple reason is that you and I may not believe in what the government is doing,we are all busy watching everybody on TV saying everything is wrong with the government. But there are some good things,which the government has done for the rural economy. We might find the next elections to be an endorsement of the government’s work at the grassroot level.

Anuradha Mascarenhas: What is your take on the RBI governor’s measures to revive the economy?

He has done a lot of good things,but a lot of work remains to be done. If you look at inflation today,it remains pretty bad. I think he would have to increase the rates again to control it. There is no way the rates are going to come down; which means the industry is again going to hit back. At the end of the day,the RBI governor can handle the monetary policy,which he is doing. In fact,he is the best person at this moment to chair that position.

Pranav Kulkarni: It has been years since the BPO industry came to India. During the initial days of the industry,attrition was the major issue with the industry. What is the condition now? Also,there were talks of having a national skills register for such employees; what is the status?

One of the effects of the slowdown is the gap between new graduates from engineering colleges and new jobs. While the colleges are churning out a large number of fresh graduates,jobs are at an all-time low. Job hopping has become a thing of the future. Most companies have fairly manageable attrition levels. In fact,Zensar has less that 12 per cent attrition.

In our company,we have something called critical talent. We identify the most talented people in the company from all the sectors. Last year,of the 600 such critical talent identified,we lost only two of them,and that is a cause for worry. It is not healthy if you ask me.

Geeta Nair: When it comes to Indian IT companies,the top three have remained the same for many years. The next level of companies has not made it big.

Why is it so?

I do not agree with that. My understanding about the market is that if you look at it three years from now,there would be maximum 10-12 significant Indian companies. There would be 3-4 companies in that league,which would be top notch. Companies like ours would cross $1 billion mark. I think that is not a matter of worry. What is worrying even for companies in Pune is that there is hardly any company that grows from (Rs) 0-10 crore and keeps on growing. Companies get stagnant once they reach a certain mark. Also,for an industry of $100 billion,if less than $3 billion comes from product development,that is a cause for worry.

Anuradha Mascarenhas: Do you think Pune is a safe city for women employees?

I think Pune is a very safe city. Women here are respected much more than in other cities. In fact,our company has seven women in the top positions. We have a forum called Women for Excellence,which has been very active for the last 10 years. Now,men have started complaining and asking for a Men for Excellence forum. The ratio of women in the company is 29 to 30 per cent. Zensar has more women heads than any other company.

(Transcribed by

Partha Sarathi Biswas)