‘No Company Is Anti-National’ — Mohandas Pai On Panchjanya-Infosys Row

Employees chat outside the Infosys Experience Center at the Infosys campus in Bengaluru.(Photographer: Karen Dias/Bloomberg)

‘No Company Is Anti-National’ — Mohandas Pai On Panchjanya-Infosys Row

After RSS-linked magazine Panchjanya accused Infosys Ltd. of being aligned with ‘anti-national forces’ such as ‘Naxals, Leftists and tukde tukde gang’, former Infosys Chief Financial Officer TV Mohandas Pai pushed back at the use of “political language against businesses”.

Infosys has been under fire for the outages and glitches on the Income Tax Department’s new e-filing portal designed by the information technology services major.

On the comments made in August by Union Minister Piyush Goyal at an event hosted by the Confederation of Indian Industry that business practices of Indian industry went against national interests, Pai said “it is the right of business to comment on policy and ask for policy, and no government should accuse them of not working in the nation’s interests”.

Speaking with BloombergQuint, Pai also laid out the process by which the Income Tax Department and Infosys should get the e-filing portal up and running again, in good order.

Edited excerpts:

Mr. Pai, you reacted to the Panchjanya article by saying that it was “very wrong” for anybody to say what the article said. Could you elaborate on why you thought so?

The [Panchjanya] article was abusing Infosys, making unwarranted statements like ‘anti-national’, ‘deliberately fomenting social dissent’, and ‘part of the tukde-tukde gang’, which was totally irrelevant to the [income tax] portal. The fact is that the portal is not functioning as per the expectations of all the taxpayers or the users. The fact is that there have still been challenges after the portal went live in late June. These have to be fixed, and these are being fixed. It may take some time and there have been interactions between the government and Infosys on this.

Infosys has not been able to complete the entire task in the time that they promised. They deserve to be criticised, and that is very legitimate.

But you can’t make value statements about a company and abuse the company and say ‘tukde-tukde gang’, ‘anti-national’, because that is totally irrelevant to the issue.

No company is anti-national, or part of any tukde-tukde gang, they are all doing business… especially a company like Infosys which has made India proud for so many years and has single-handedly set standards in this country in many areas. That is why all of us who are associated with Infosys and outside, have a legitimate reason to be very angry and upset at such statements. I think criticism is welcome and needed, there is no doubt about that. That is all the truth. But making value judgments and [such] statements are totally wrong and unnecessary and uncalled for.

You retweeted a post that said and I quote “nowadays it has become routine to label an individual or group anti-national when they have difference of opinion.” What made you retweet that? Is it limited to this particular case or something you fear might be happening across the business space or broader society?

If politicians call each other anti-national or something, that is par for the course. Because politicians abuse each other. If ideologues and ideological people call each other things… for example, the Left calls someone from the Right ‘you are anti-national’, the Right calls someone from the Left as ‘anti-national’, one side calls the other a communist or a capitalist stooge, all of those are standard abuses.

But you should not use such terms for businesses. [Companies] run in a country and are regulated under the law and they do business legally. The business cannot be anti-national or anything like that—which is a very political term—for whatever it does in the country.

You also retweeted a post that said “RSS has uncontrollable elements”. Is it just a question of uncontrollable elements? While this was one person writing in the RSS’ official magazine, one more recent event was the comment made by Union Minister Piyush Goyal at a CII event saying ‘industry practices were against the country’s interests.’ That was made after the Tata Group gave feedback on the consumer protection policy that’s being worked on. Should the government’s reaction to how one or more business houses react to a proposed policy, have been the way the minister put it in that instance?

I think they are two different things. We should not mix the two. One is about making comments against business. The Left has been continuously abusing Indian companies. The Left has not wanted India to open up, they have been abusing multinationals, that’s the way they ride and express themselves because they are ideologically against capitalism. Now, there are elements of the Right as well that are very swadeshi and who think that India should not open up and should be only for Indians, etc. They have a point of view and they keep writing and that is fine so long as they don’t accuse any business of being anti-national and all that, which is not right. Businesses are not in politics.

As far as the minister making a statement about some companies, I think it is a statement which should not be made in public.

We must understand clearly that in society and government, businesses will lobby for what they think is good for them. They will always lobby to improve their business. Their interest is to ensure business improves, they are able to make more profit, create wealth, that is their job. There is nothing wrong with that. We have institutions like CII and Ficci which are industry associations in which businesses come together to ask the government to change policy and to do anything else.

The government has the responsibility as the legitimately elected political party, as the government of the country, to protect the interests of all sections of society.

It is the right of business to comment on policy and ask for policy, and no government should accuse them of not working in the nation’s interests. That is very wrong. Those (comments) hurt everybody because it is their right. A government minister has to look at every interest and say very clearly ‘that is your point of view, you want it, but I have to look after consumer interest, everybody’s interest, we will use what you say as an input in policymaking because our role is to protect everyone, and in doing so, serve the country’s interests’.

We must always accept that all businesses in the country which are run legally and legitimately are working for the nation’s interests in the larger context.

Fixing The Tax Portal

There are serious concerns about how Infosys has performed over three government projects — we've had failures occur with GSTN, MCA-21, and now the Income Tax Portal. You understand information technology services contract very well. What is the best way for the government to rectify this in the contractual framework — without a business being put into areas that you see as political discourse?

We must understand that large government projects will always have challenges. There were challenges in the passport portal earlier, as in the ESI portal, GST portal, MCA… Why do the challenges arise? It happens because both sides do not put in enough project management capacity; and the complexity of the project. When you hire a vendor to write a particular software for you, you as the user are supposed to define the specifications in detail. Very often, government departments do not have the capacity or expertise to write out the specifications in detail.

The challenges will remain in the future too because of the nature of the beast. Now, what should both sides do?

The vendor side should have better project management, hire more domain experts who will talk to them and help them. They should insist with the client that users should do much more intensive testing. Only by more intensive testing do you come to know the nuances of a project because it takes time to do that.

From the government’s side, they must keep the same staff members that were there when they ideated the project till it is completed or substantially completed. They should have a handover mechanism so that the accumulated learning is not changed. When you change people mid-stream in the government, thinking that the new people can come and do it, they cannot because there is so much undocumented learning. On the vendor’s side too, you must keep the same team as much as possible and have experts document everything else.

Then the government should have more testing. For example, when the earlier Tax Information Network was set up, I had told the tax department ‘why don’t you involve chartered accountants’? The earlier CBDT member went to the Institute, called all of them, and started creating certified service providers among CAs and trained them. So we created a large user community that could help people transition to digital media. They had much more time — it took four or five years.

In this case, the government suddenly said ‘everything will change in one week. In that one week, we will shut down and have the new portal up’… there will be magic, it cannot work that way.

Both of them made mistakes by

  1. Not looking at all the risk and putting risk mitigation in place.

  2. Not having a change management process for the users for the department or the vendor.

  3. Not having a communication protocol to answer, when things go wrong – how do you communicate, what do you do, who has to communicate, etc.

  4. Not having a grievance redressal mechanism that is transparent.

Due to a lack of information, nobody knows the status of the portal today — how many utilities are available, how many have been increased since the first time, how many returns have been filed, how many challenges are being faced now, what are the other forms that will be set up… people don’t know.

Only when you do all these things will things work. Remember when U.S. President Barack Obama launched his health insurance portal, it crashed. On GST, people say it was difficult — yes it had a short time frame, the rates were communicated very late, but don’t forget that in the first month 56 lakh filers filed the returns. When a new large system comes which consolidates 17 tax laws, if 56 lakh filers file, and 82 lakh register, that is a big achievement. You cannot say it didn’t work. Who are the ones who made complaints about the system? Small traders and others that did not want to file, who blamed the system, and people who had old technology and old computers, and could not put it up because the links were very slow.

There are a lot of challenges when big systems go live, and big transformation takes place. That is going to remain, that is going to be the norm going into the future. Both sides need to improve communication, transparency and building good change management practices, they have to do it.

Would it be fair to say that if there truly were enough concerns at a government level that a firm had failed to deliver on contractual commitments — that they wouldn't have been eligible for the most recent contract?

Look, you cannot say Infosys is not eligible, for one reason which is that the earlier tax information network has been maintained by Infosys for 15 years and it has worked very well. You can’t say that GST has not worked, because it has worked, and very well at that. Look at the GST system — every month the filing has been going on. It takes two to three years to settle down. You can’t say Infosys is not competent, and can’t say that the process is not rigorous. The process for the last system is a two-bit process — first, you look at technical competence, then you look at everything else.

Second, price is only one component. Some people are making stupid remarks that Rs 4,000 crore was paid. No Rs 4,000 crore was paid. The payment will be based on the number of returns, from what I know. It will be based on transactions, there is no lump sum being paid anywhere.

Also, the government requires big vendors, it can’t small companies. If some things have to be added or maintained, someone will have to invest. To give it to a small company — they will go bankrupt because the government will not pay them. A large company will put in resources and hang on to make sure it works. I am very confident that the portal will work in the future. From what I know, crores of transactions have already been put in. There were more than 75,000 queries, and 70,000-plus have been answered.

The fact is, all that information should be in the public domain.

I would like the tax department and Infosys to file a report every week to say ‘during the week so many returns were filed, these many forms were filed, that much work was done, was processed, time was taken up, so many complaints were received, so much was redressed. They must do that.
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