The tax portal problem is a goof-up by both
sides, and making Infosys the only villain in the story is quite unfair, argues
Shyamal Majumdar.
IMAGE: Union Finance Minister Nirmala Sitharaman presides over a meeting
between senior finance ministry officials, tax professionals and Infosys
managers on issues with the new income tax portal, through video conferencing,
in New Delhi, June 23, 2021. Photograph: ANI Photo
The Infosys Website has a lot to say about the company's close association with government projects.
Sample this: The software
major is 'proud to be involved in the nation-building journey' and several of
these projects are 'compelling evidence of our efforts to enable India's growth
story and make it a reality for all its citizens'.
Given the events over the
past couple of months, the carefully chosen words may look like a cruel irony.
One of India's marquee
companies has been named and shamed by the government repeatedly and that
includes tweets by the income tax department stating that the 'Ministry of Finance
has summoned Sh Salil Parekh, MD & CEO @Infosys... to explain to hon'ble FM
as to why even after 2.5 months since launch of the e-filing portal, glitches
have not been resolved.'
This came a month after
Finance Minister Nirmala Sitharaman tweeted that she hoped '@Infosys &
@Nandan Nilekani will not let down our taxpayers...'
It's anybody's guess as to
why the government went on an overdrive on tweets and press statements against
the company and did not talk to it directly about its displeasure over the
handling of the new tax portal.
It's an unequal battle
anyway as very few, least of all India Inc which has usually crawled when asked
to bend, would have the guts to point out the abject failure on the part of
government officials in the portal mess.
All that Infosys managed to
say is it was fully committed to doing all that it took to sort out the
glitches.
What remained unspoken was
the utter failure of the tax officials to ensure adequate trial runs so that
the problems were kept to a minimum before a public launch.
There is no denying that
Infosys must take a major part of the blame for the problem.
Former Infosys director
Mohandas Pai hit the nail right on the head when he told Swarajya magazine
that companies like Infosys didn't have the domain expertise in complex matters
like income tax as they were technologists.
Infosys, he said, also
goofed up by not setting the right expectations.
They should have gone to
the government and told them that an adequate number of chartered accountants
should be deployed with the help of ICAI -- a move that has now been taken.
Infosys also should have
put more senior resources to interact with government officials and shown
better project management and testing skills.
Points taken. But what
about the accountability of government officials who were in charge of
overseeing the project?
If they could show their
nimble-footedness in shaming Infosys publicly, why didn't they show the same
alacrity before the portal was launched?
The tax department just
forgot the basic thing that when a new and complex system like an IT portal was
being set up, adequate trial runs were the minimum that's required.
The other factor in
government projects is the lack of ownership, as bureaucrats get transferred
regularly.
Infosys should have known
better as its problem in dealing with the government is nothing new (the
company faced similar problems when it was working on the MCA21 and the GSTN
projects).
This is what Infosys co-founder
N R Narayana Murthy said six years ago in an interview to CNBC TV18.
Murthy said Infosys and
other tech companies did not make any profit on government projects and unless
the Centre came up with reasonably attractive and competitive set of clauses,
large companies would not be keen on working with it.
Highlighting issues such as
delayed payments and changes in project requirements mid-stream, the former
Infosys chairman went on to add that government projects needed to have clauses
at a par with international practices.
Infosys should have taken
Murthy's words more seriously.
Other Infosys executives
also had gone public in the past with their frustration in dealing with the
government.
In an interview, C N
Raghupathi, Infosys's then vice-president and head of India business unit, had
talked about how the company was taking a 'hard look' at government deals to
see if they made sense.
The main problem is the
buy-in. Even if the top bureaucrats are convinced, they fail to convey that
vision to the rank and file, posing execution issues as many of these
transformational projects require collection of tonnes of data at the last
mile.
Besides, the way the
government structures its technology projects is also flawed.
For example, most
government technology contracts require the vendors to work as a system
integrator, which means they have to not only provide the software and
services, but also have to arrange the hardware elements, which constitute over
half the total project cost.
While most IT companies
have to pay the suppliers of the hardware upfront, the payment from the
government comes many months later.
The short point is that the
tax portal problem is a goof-up by both sides, and making Infosys the only
villain in the story is quite unfair.
Almost two weeks after the
RSS-affiliated Panchjanya accused Infosys of being
anti-national, Sitharaman was the only government representative to say that
what had happened was 'not right' and that the two sides were working together
to resolve the glitches.
One wishes that a
government, which had been talking repeatedly about the need for bridging the
trust deficit with industry, had come to the company's defence much earlier.
Infosys certainly deserved
better.