Tuesday, June 23, 2009

Public Sector IT Industry

The worst hit by recession have been the thousands of engineers that the nation has produced over the years working in private companies. Back in 2001-02, it was primarily the IT industry that had to bite the dust, but the current monster has gobbled up many industries. Being the world's largest outsourced market, India had to face the heat too. And Obama's "Bangalore to Buffalo" stance did little to soothe the Indian worries. The collapse of investment banks shut the doors of hundreds of Indian start-ups which mainly were linked to the IT market. It's good to see however Indian giants like TCS and Wipro continue with their business with minimum lay-offs. Adding oil to the fire was the Satyam controversy that has rocked the very foundation of the Indian IT industry and has now over 10k employees holding their breathe to hear the worst news of their lay-off sooner or later.

Though a few foreign Governments have started to bail-off many companies including stalwarts, India luckily hasn't come to such a stage yet. With over a lakh engineers out on the streets looking for jobs and thousands to follow, it could be a good move by the Government to start off with its own IT industry. The public sector already has well established industries in electrical engineering(BHEL), defence(DRDO), thermal sector(NTPC), electronics(BEL), aviation(HAL), telecom(BSNL) etc. The so called 'Navratna' companies have been the faces of technology of the nation for early 5 decades. However there is yet to be a public sector undertaken IT company. With such a huge IT-sector population it would be wise enough for the Government to develop it's own expertise. A possible start could be the taking up of closed start-up companies under its own domain and build upon it. Many Government IT projects are now being outsourced which can be taken up by its own company if present.

However most of the Government projects that are being outsourced have Indian private companies as the service providers. A clear trade-off should be developed by the nation to distribute its projects equally amongst its own IT company and the private sector as the Indian private IT industry cannot be hurted. I feel in a year or so, when the tides of recession start to recede, is the apt time for the Government to start its own IT industry which would prove beneficial to the Government as well as the comman man.


Prasoon Joshi said...

First, the India IT industry, if not bloomed during this recession, certainly didn't face the doom! The BPO sector which totally depends on outsourced work infact did good. Satyam issue was certainly a black mark but it had nothing to do with the recession.
Indian Government may not yet have a twitter account (I really don't know if it is indeed needed!) as yet but it sure is 'IT aware'; there are a number of initiatives across sectors with an eye on IT, either as a support group or an independent sector in itself. There are a number of initiatives undertaken by the government like CDAC, NIC, etc. which are doing a good job in building up the 'IT infrastructure' for India (like NTPC, BHEL, BEL, etc. do for their respective sectors). Even in other sectors, no government controlled body (company) is involved in outsourced projects (apart from some mutual funded R&D projects done in collaboration with other governments). Expecting a government body to vie for outsourced projects would demand a lot of unnecessary investment in the IT sector. Instead the government can create more jobs by aiding companies like Satyam and enabling them to hire more people in IT and ITES jobs.

Post Man said...

@Prasoon Joshi
Correct. The Indian IT market didn't lose much stability but has been slightly rattled. Though the Satyam scam has nothing to do with recession, it has come forward at a very wrong time. I don't mean to say it should have been hushed up and reveald after the recession, but it made matters worse for the already worried IT employees. Government could aide private firms, but the employees still won't have the carefree environment of a Govt. job. The IT industry is fickle and there would be another point down the lane when the world economies would hit low as it happened in 2001 and at the moment. Parenting the doomed start-ups under it's own brand and gradually developing it into a public sector enterprise would ensure a relaxed life even for many IT professionals. A large portion of youth are looking forward to be a part of public sector companies. A relaxed and a carefree environment doesn't imply a reduced output as has been proved by Navratna companies.

Not all Govt. companies are involved in outsourcing but few big ones are. BHEL for example has and will be involved in major turbine/generator-manufacturing projects for private firms stationed in Middle-East and developing nations like Bangladesh,Kenya,etc as well as for firms like Reliance,GMR,LANCO etc. These projects constitute more than half of the annual produce of BHEL sometimes. Similar is the case with BEL too if not 50%. I think it would be alright for a Govt firm to work on outsourced projects.

But yes, as you pointed it would require a good investment but I don't feel it would be unnecessary.

eceinnovator said...

in these situations IT students wil hav 2 change their thoughts 2wards communication field which z d application of software n which z used 2 develope IT field such as mr. genious sam pitroda.....bcoz there r too many software engineers in Ap.nw Ap z software hub bt in future itzz going 2 b d telecom world's greatest telecom companies r eager 2 start wrk @ hyderabad

itzz juzz my opinionr