After Infosys Attack, “Everyone is Scared” Echoes in India Inc

2021-09-10

After Infosys Attack, “Everyone is Scared” Echoes in India Inc

Recently, the RSS called Infosys "anti-national" for letting down the tax system. This incident started sending a chill through the industry, suspicious of falling on the wrong side of Prime Minister Narendra Modi-led government.

Several industry executives told Reuters that a public attack against two business giants led by Modi's officials and his ideological allies had frightened the business community.

A magazine run by the members of the Rashtriya Swayamsevak Sangh (RSS) over the weekend launched an attack on tech giant Infosys for its inability to resolve glitches in the income tax website is used to manage.

It was in the last month that the Indian Finance Ministry "summoned" Infosys' CEO over malfunctions on the income tax website and other tech issues in an unusual step and took to Twitter to announce the summoning. It steps by the finance ministry heightened a media frenzy around a company that has for long considered the face of India's IT prowess.

In India, Prime Minister Narendra Modi’s priority has been safeguarding domestic businesses. While at the same time, the government or RSS criticism of foreign businesses such as Amazon and Monsanto is expected, the local businesses are rarely caught in the clash.

However, the latest events have elevated concerns among business leaders regarding whether Narendra Modi is now taking a hardline approach towards domestic giants.

While one venture-capital executive argued the criticism was akin to "harassment" of businesses and risks souring investor sentiment, another executive was working at a global consultancy and remarked, "everyone is scared".

The co-founder of the Indian PR firm Perfect Relations and an image guru, Dilip Cherian, said, "The frontal attack throttled on the iconic elements across all Indian businesses have upped the need for the corporations to ensure that they are conforming. And it is not simply with the tax issues, but also with other government initiatives,".

The Chairman of Maruti Suzuki, RC Bhargava, defended Infosys by saying it played a crucial role in building India's software reputation globally. However, Bhargava said, "It needs to explain the glitches, but it doesn't mean there is a conspiracy to damage the country."

However, a senior member of RSS said that there is nothing wrong with how the companies have been criticized by adding they must be thick-skinned and held accountable for their actions. An RSS official (declined to be identified) added, "Why should questions not be raised, have corporates become a holy cow?"

The Modi government is yet to comment on the backlash so far on social media and from politicians. The sources who spoke to Reuters didn’t want to be identified as they feared a government's reprisal. Further, industry lobby groups haven’t come out to spoke against the government or RSS.

In an editorial, The Indian Express said it was "time for India Inc to stand up", sighting business leaders had all maintained "a studied - and a more strategic - silence in regards to the vitriol that is seeping into the public discourse."

In August, when the Infosys CEO was summoned, the finance minister bore "deep disappointment and concerns," giving the company until September 15 to fix the issues.

Panchjanya, the RSS magazine, said Infosys was making the same mistakes repeatedly, which created doubts about its motives and credibility. It said, "There are allegations that the management of Infosys is deliberately trying to destabilize the Indian economy."

Concerns remain regarding others may be as well be targeted.

A mutual fund manager with Infosys and Tata investments said he was worried. It indicated "the government was not pro-business" and fears that other companies can face similar backlash for lapses.


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