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A long way to Nasscom 2.0

The Narayana Murthy report highlights the IT industry body’s crisis of governance

Written by Srivatsa Krishna | Published: March 22, 2013 2:49:03 am

The solution to shooting oneself in the head is not to start shooting oneself in the foot instead,but rather to stop shooting completely. Nasscom seems to have forgotten this first principle,and band-aid solutions will not help solve problems that need surgery. At the heart of the problem is that Nasscom is like a joint family headed by a bunch of patriarchs who want to keep the youngsters together,but each member of the family,with their own legitimate aspirations,wants to live life their way,in their own home.

Make no mistake: Nasscom is one of the finest institutions in India. The current leadership — and earlier Dewang Mehta and Kiran Karnik — have done an excellent job in some aspects but poorly in others. What’s happening to such a fine institution,and who is running it to the ground?

N.R. Narayana Murthy’s committee on restructuring Nasscom has presented several commendable recommendations and if implemented in letter and spirit,can serve the industry well. Murthy wants Nasscom to become one of the top five industry associations in the world. But can it do so with such poor corporate governance?

Rama Vedashree,Nasscom’s vice president,tweeted asking why people were questioning Nasscom and if it was their business to demand accountability. After doing so,she protected her tweets to escape public scrutiny. Is Nasscom immune to rational questioning? Or is it trying to hide some wrongdoing from the government? The IT industry that demands transparency in government is the first to hide behind opacity and threatens people when asked to show the same transparency. If someone asks these pertinent questions,why does it go completely defensive,want to shoot the messenger and not answer them?

Members of the executive council (EC) complain that the past chairman’s council (PCC),whose politics appear to be no less murky than the Pradesh Congress Committees,wants the EC to be a rubber stamp. The EC will be presented decisions taken by the PCC,often in conference calls prior to the EC meet,for ratification. Emails between PCC members before last year’s crucial EC meeting that was to discuss other names as competition to the current president showed the divisiveness inside the organisation.

Thus it was no surprise that the Murthy committee’s recommendation that the immediate past two chairmen not have voting rights on the EC,was evaded without a proper discussion. The election mechanism was changed in 2011 in a subtle but clever move,where a member had to vote for a minimum of 10 positions (and not just for any one),which,with a limited number of contestants,results in all such 10 preferences getting a vote,giving the large contesting companies an undue advantage over the small companies. Without a fundamental change to the roles of PCC and EC and their relationship,and a transparent,fair voting system — perhaps based on market capitalisation,not revenues — Nasscom cannot get good corporate governance.

In private conversations,many founder members of Nasscom concede that the old guard does not want a strong personality or someone from outside the industry to lead them,for they feel threatened. The old guard also blames the EC for not devoting sufficient time to Nasscom. Harish Mehta,one of the founders,is on the PCC,but he seems to be waiting for someone who is both a gentle reformer and a keeper of the faith to lead Nasscom 2.0. Indeed,Nasscom 2.0 needs someone who will command the respect of both industry and government but is also an outsider.

Murthy has suggested seven vertical councils (starting with BPM and internet),regional and country councils each with their own ECs,funding of Rs 79 crore (up from Rs 28 crore) and revenue generation of Rs 89 crore over five years (up from Rs 48 crore). New revenue streams identified are increased membership fee,surplus from events,certification programmes and content services to individual subscribers. Further,it sets a target of $75 billion for domestic business and $300 billion for the IT industry by 2020.

The report appears to be silent on how Nasscom can become global. What will Nasscom’s role be with respect to domestic hardware and SMEs? How can Nasscom drive intellectual property and simplify the whole patent registration process? How is Nasscom going to address emerging geographies,where most new growth is expected? Finally,how can it repair its lately adversarial relationship with the government,especially the ministry of finance?

Nasscom,akin to a typical Indian joint family,is transforming into a modern,nuclear one. There are several good traditional values that endure in successful joint family systems and these need to be preserved from Nasscom 1.0,with an outlet for the legitimate aspirations and dynamism of the “youngsters” in the family. Nasscom can afford to ignore the pressures within only at its own — and India’s crown jewel,its IT industry’s — peril.

The writer is an IAS officer. Views are personal

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