IT does nothing for India!!

By | November 15, 2007

In a stinging statement, A M Naik, MD of Larson & Toubro accuses the Indian IT companies of “doing nothing for India”. In an interview with Times Now, he also went on to say that IT companies should leave the civil and mechanical engineering students to be employed in infrastructure and manufacturing industry rather than writing C++ and Java code.

Let me address the second point first. Why do engineers, or any one looking for a career after a degree, look at the IT industry? The simple and very obvious answer to this is money. Be it the IT industry, be it the process outsourcing industry, they all pay well. The minimum salary that a graduate can draw from a BPO company could be anywhere in the range of Rs.10 to 12k every month. For an engineer, it could be around Rs. 15-18k per month and for software engineers from really good colleges like IITs, it could be very well in the range of Rs. 25-30k per month. For a country where the average person earns not more than Rs 2-3k, such salaries are a dream come true. What does the manufacturing sector have to offer? Typical starting salaries in the manufacturing sector range from Rs. 8-10k every month.

But the answer is not simple. The manufacturing industry does not offer as many jobs as offered by the IT industry. Infosys alone hires thousands of engineers every year. A friend once said that in Bangalore, IT companies outnumber tea stalls! Manufacturing and infrastructure industries, on the contrary, hire a miniscule number of people. And no, this is not because talent is drawn to IT, but for the simple reason that they do not generate as much jobs as IT!

OK. So its already IT-2, Manuf -0. But the match ain’t over yet. Career growth in manufacturing industries is painfully slow. My dad has been working in the manufacturing sector for over 25 years, working for one company all this while. He is qualified, he’s got a masters degree in Math, but all he earns after 25+ year slog is Rs.11k. Barely enough to hold together a family of four. IT on the other hand, has been averaging a hike of at least 20% per year, and if you are an outstanding performer, you might as well get a hike as high as 50%.

Higher salaries, more number of jobs and better growth. IT companies have it made for them. But wait, IT is vulnerable to slowdown, we have already seen one in 2000, and industry pundits predict another in 2008 or 2009. So why prefer a ship that is bound to sink? The answer is simple, would you rather be in a choppy sea, or in a ship that will keep you afloat for a long time. IT guarantees to be that ship.

Add to these the comfortable work environment provided by the IT industry, and the perks that come along with the job providing an added attraction to an IT based job.

Now coming to the part of the story that irritates me the most. Mr Naik makes all these statements even though L&T itself has IT in its portfolio. L&T infotech mentions “Offshore outsourcing of Application Maintenance as well as Application Development” as its prime focus area. So what is the talk about IT not contributing to India’s growth?

There is a stench of hypocrisy in Mr Naik’s statement. Is it genuine concern, or is it a result of frustration of the slow growth faced by the company he leads? Whatever be the case, one thing is for sure. Mr Naik has stirred a hornet’s nest.

Blaming the IT companies for pulling talent is certainly not the right thing to do, when talent itself prefers IT. Manufacturing sector needs to attract talent better. The top of an engineering class wants the highest pay of all. If L&T, or any other manufacturing company offers that, the topper would be theirs.

So grow up Mr. Naik, and stop blaming IT. It ain’t a good idea to throw stones at the house you live in yourself.

I am sure all this is visible to Mr. Naik. And yet he chooses to act like a 2 year old boy whose toy has been taken away. Grow up sir, we expect more maturity from the MD of an industry leader in manufacturing.

Author’s Notes:
1. L&T Infotech website –
2. Times Now article here.
3. References to IT in the above post must be read as IT & process outsourcing

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