T.T. RAM MOHAN writes from Ahmedabad: What precisely are the grievances that people in Bangalore have against IT folk? The litany of complaints includes: rising property prices thanks to the IT employees’ purchasing power, grabbing of prime land by IT companies, the bar and disco culture, and IT employees being preferred in the bridal market.
There is a clear divide between other middle-class professionals, including the many in the public sector, and the IT employees. Those on the former side resent the rise to prominence of the latter.
The Outlook story set me thinking. There are other professions that pay even more—the financial services sector as well. How come we do not see a similar resentment towards investment bankers and private equity people in Bombay?
I guess that’s because partly the City is not yet identified with these professionals, they are not that numerous and, besides, in Bombay, there are other sectors that absorb people and pay well. IT dominates Bangalore in a way in which other sectors do not dominate any metropolis and, also, the disparity between a dominant sector and other sectors in any city is not as great. If the proposed International Finance City materialises in Bombay, we can expect an even greater backlash.
A second reason could be that IT does not have the same linkages with the domestic money. Finance professionals create prosperity in companies they take public, the stock market benefits thousands of shareholders. IT is seen to benefit only the people in the sector and nobody else. True, as Subroto Bagchi points out, IT creates benefits (such as declining telecom costs) but these effects are indirect and not as visible, hence the resentment.
Thirdly, to some extent, the prosperity of IT and its employees is seen as coming at the expense of the economy. IT companies have benefited from huge allotments of land at concessional prices, they benefited from an undervalued rupee for over a decade and they benefited from tax concessions as well. The charities made by some IT personalities are seen as poor compensation for the benefits earned.
So, what do we do? Throw IT out? Not at all.
Can greater philanthropy help? To some extent, maybe, for instance, a classy university run at affordable prices on IT endownments might help assuage popular sentiment.
But the biggest corrective, I reckon, will come from the very economic environment that created IT’s prosperity—no more concessional land, a decline in profitability from a rising rupee and its attendant costs (including layoffs in the IT sector) and a greater focus on the domestic economy on the part of IT firms in the face of a rising rupee.
(T.T. Ram Mohan is Professor, finance and accounting area, at the Indian Institute of Management Ahmedabad. This piece originally appeared on his blog, The Big Picture, and is reproduced here courtesy of the author)
Read the full article: Bengalooru Bangalore-d
churumuri 
Here is an idea. The Karnataka Govt, HR managers, and finance professionals can please comment on the feasibility/legality.
1. The state govt should introduce “Karnataka Credits” (similar to Sodexho/Ticket Meal Vouchers). (For easier administration, prepaid charge cards similar to debit cards can be given, instead of paper vouchers).
2. Any employee (who pays professional tax) in Karnataka should mandatorily be paid 5% of their salary in this KC currency.
3. This currency can be made use only for:
a. Travel inside Karnataka only by KSRTC/Private buses/ railways/Airlines.
b. Tourism dept conducted tours inside Karnataka.
c. Kannada movies/ plays/ concert tickets.
d. Kannada books/ Magazine subscriptions.
e. Kannada language learning institutes, other Karnataka arts learning.
f. having Karnataka food in accredited hotels (there can be a new govt body giving accredition to hotels if the menu consists entirely of Karnataka items).
g.
4. To sweeten the pill for the employees, this 5% salary can be made tax-free.
5. This credit should have a validity of 6 months only, so that employees are regularly forced to spend.
Advantages:
————–
1. Forces employees to spend money on local economy.
2. Gives huge boost to tourism
3. Sucks money out of Real estate sector (as employee has lesser income to spend on EMI), or sitting idle in bank accounts.
4. Huge potential to create jobs in tourism/entertainment/hospitality sector.
What do you all think?? Feasible or not??
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The author has rightly pointed out the ‘visibility’ factor of the IT sector in cities like bengaLooru and Hyderabad. The disparity between such high-paying sector jobs and the regular ones catches anyone’s eye easily and that may be the sore we see today in popular opinion. All in all the whole act has turned out to be about making money and most of it is inwardly looking approach, of course not to forget a self-centric view of the whole world, like “we pay taxes and what do you complain about” sort. The IT industry in part and the pay its employees get is to be blamed for such an attitude. With early prosperity, young minds do not need to do any thinking through; in fact this purchasing power endows them with a sense of superiority which makes them ignore their surroundings and all the subtle signals their environment sends.
As the author says, it is all bound to change if and when the industry has to think completely out-of-the-box to sustain its growth rates and retain its profit margins along the way.
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@Ashok:
Where the hell does kannada come into picture here? You pointed at least 4 points for which your currency can be used:
c. Kannada movies/ plays/ concert tickets.
d. Kannada books/ Magazine subscriptions.
e. Kannada language learning institutes, other Karnataka arts learning.
f. having Karnataka food in accredited hotels (there can be a new govt body giving accredition to hotels if the menu consists entirely of Karnataka items).
Even if kannada is totally ignored, who cares? This currency that you talked about will only piss people off, and that too at the expense of the taxpayer’s money.
Nobody will wish to spend on a kannada movie/book/play unless he already knows that language. That money, if it expires in 6 months, will mostly go to drain as it will never get spent (apart from kannada enthusiasts like yourself). People will protest to get their money in Rupees and not in some random and useless state specific currency. The whole point of salary that an individual is entitled to spend his money in any way he wants. Introduction of such a currency will be breach of freedom of expression. The points that you made are relevant in the sense that all industries/ tourism etc need to be boosted but not in a fascist way, not in a way which taxes the citizens for the betterment of a random language and the speakers of that language.
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@John,
Thanks for the comments.
My idea is to encourage and incentivise (if there is word like that) spending in the local economy. Removing/adding one or two points in the list doesn’t matter. I am sure with greater thought other things can be added.
btw, I am not a Kannada enthusiast nor am I a Kannadiga :-) . My total vocabulary in Kannada is of 12 words :-).
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People do get Tax-free Meal coupons (which are used to buy everything else apart from Food items). There is a precedent.
You may also know that Kannada movies have a lower tax-slab to encourage movies in Kannada. This is “at the expense of the taxpayer’s money”. So there again a precedent to encourage a local language. There are a lot of arts, and Sanskrit studies which are totally dependent on Government grants, which is again “at the expense of the taxpayer’s money”.
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This is what i call “self-dabba” . its business , don’t project a non-existent do-gooder image.
@ TTR
“True, as Subroto Bagchi points out, IT creates benefits (such as declining telecom costs) but these effects are indirect and not as visible, hence the resentment. ”
How are these over-hyped IT companies ( agreed there are a few like HCL and a host of smaller ones ) related to the telecom revolution . It was Reliance which brought the tariff down and foreign telcos like Nokia and Motorola which brought phones to millions of Indians . If there are MNCs which are changing the lives of millions of Indians its ITC , Tatas , Ambanis etc ( even if all they are after is money).
How many Indian IT , electronics companies have pioneered some technology or idea which has changed the face of this country ?
The most famous of these gets most of its revenue from North America and primarily from Banking…. Is this the indirect & invisible effect the author is talking about ?
What e-governance initiatives have the Indian IT companies come up with ?
All they want is cheap land, tax holidays & a weak rupee…..Its understandable that its business and they are after money. IN THAT CASE WHY GLORIFY THEM AS IN THIS CASE AND GENERALLY WITH THE MEDIA ?STOP PORTRAYING THEM AS SAVIOURS OF INDIAN INDUSTRY. ALL THEY HAVE DONE IS IMPROVED INDIA’S IMAGE ABROAD . ONE IMPORTANT REASON FOR THIS COULD BE THAT THEY HAVE IMPROVED THE BANKS, HOSPITALS , WAREHOUSES , RETAIL OUTLETS IN THE WEST .
Some of these dumb companies don’t even realise the potential of the domestic market ( of which a significant pie has already been captured by IBM and Accenture) .
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“Aiming to put one billion people on to the information superhighway, the Centre on Thursday joined hands with leading IT and telecom companies for popularising low cost desk-top access devices which can be used to browse the internet.”
http://www.deccanherald.com/Content/Aug292008/scroll2008082987235.asp?section=updatenews
If this even partly implemented – it will probably one of the best things which happened to us since independence. Especially for the youth.
Looking forward to how this pans out in the days to come…
A bonus – Churumuri readership will zoom :)
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