‘I am not apologetic about the IT Ministry.’

am not apologetic about the IT Ministry.’
–Pramod Mahajan, Minister of Information Technology

it was formed last year, the Ministry of Information Technology
(MIT) got some scathing reaction from the industry and press. And
the questions: what value would a coalition government struggling
with its own political problems and agendas bring to the IT table?
Today, several months down the line, the industry has reconciled
itself to the MIT’s existence, and there are at least as many positive
comments as negative ones. But once again, the recent Union Budget’s
low-key IT package brought up the question of the MIT’s contribution.
DATAQUEST’ Chief Editor Prasanto K Roy and Executive Editor Arun
Shankar put these concerns to Pramod Mahajan, the minister of information
technology. In a frank and freewheeling discussion between sessions
at Parliament House, he defended the MIT, outlined its plans and
vision, and spoke on IT, ministries, convergence and a lot more.
This is the full text of the interview, excerpted in DATAQUEST’s
issue dated March 31, 2000.

Your ministry’s formation
was met with reactions from cautious welcome to worry and consternation.
Someone remarked, “India excels in software and fashion–and
neither has a ministry!”
I’m aware of the criticism! I think it has been in a lighter
vein…that the creation of the ministry would hinder the IT
industry, which progressed only because there was no ministry. If
you forget the lighter part of it, I don’t think a sunrise industry
like IT can progress without the focused attention of the Government
of India and the State Governments.

The government role comes in at two places. IT is a fourth generation
of communication. Humans went from gestures to speech to writing,
and now we are in the digital language era. IT is fast, transparent,
an advanced form of communication. To be there, you have to change
everything in the third generation. Even today [in India, a photocopy]
is not an ‘authenticated copy,’ though and it looks exactly the
same. The law allows a carbon copy, but not the photocopy. Many
courts do not accept faxes, forget about emails. So a whole lot
of laws meant for the written world have to change. Almost every
law book, statute book will have to be rewritten.

At the same time, this
digital age creates its own problems. There are hackers. As there
are thieves on the road, and a law-and-order situation in the real
world, there’s a law and order situation in the cyberworld. Someone
has to deal with this. You need law-making in a wide range of things.
You need a ministry that focuses and collects all these things,
makes a study, brings it to Parliament. So in a way you need some
kind of structural law framework for the industry to progress.

Second, you need a wide
network of infrastructure, which in our country comes mainly from
the government. You need a policy framework, a legal framework,
for any industry to grow, and all this can only be done when there
is a focused ministry. You needed no ministry years ago when IT
was much smaller. Now you do. President Clinton sits with so many
people and discusses IT. They don’t have a ministry system. We do.
So I am not apologetic about the formation of this ministry!

What have you achieved
so far?

In the last 120 days of my ministry, I have showed to the people
that I have not brought a red tape bureaucratic ministry, but I
have given a red carpet for the industry. For the first time, the
IT industry has an advisory board of resident Indians who interact
with this IT industry as an advisory board. We are constantly in
touch with Nasscom. I think this is the most industry-friendly ministry
where interaction is available! The experience shows that this ministry
has not created any problems for the industry.

Are the critics changing
their views?

I don’t know, but at least I have not given any opportunity for
them to say, “Look, because of your ministry, this has not
been done.” The IT industry was progressing in the last decade
from 1991, but it only became a talk of the country when the task
force was formed. That was a government action which they were accepting.
Then the Prime Minister started speaking about it and of his dream
of India as an IT superpower. So I am not apologetic about it, and
I still maintain that if somebody has a problem [with my ministry],
we are here to solve it. We don’t have an ego problem. We want to
help this industry. Frankly, though every decision of the government
is binding on me as a cabinet minister, within the government I
don’t mind working as a lobbyist for this industry’s right causes.
And if I take myself as a lobbyist for the IT industry with the
government, I don’t think anyone should have a problem with the
creation of this ministry.

Are the MIT’s objectives
from the BJP-coalition government’s agenda, or is there a separate
vision statement? The 1998 Task Force had 108 recommendations. Are
your objectives in tune with those?
The ruling party or ruling coalition agenda doesn’t talk much
about IT. In a manifesto or minimum program for the people you have
to talk about so many things, so frankly it only vaguely talks about
India becoming an IT superpower, with no details charted. But definitely
there are three task force reports with us for implementation.

Where do we stand on
those 108 recommendations? Are there some top-priority ones for

The first thing we have done is to put the three reports together.
There were many overlapping points, and we are pruning them and
making them [more precise]. Then there were 50 to 60 recommendations
that were small in nature, where we needed notifications, which
have already been done. Wherever the Government had to take a decision
on the tax structure, most of them have been implemented. Now the
rest are mostly long-term decisions.

How would you rate
the implementation of the Task Force plan?

I don’t say that I am happy about the implementation, though I don’t
think MIT itself can implement all of them. When you form a task
force of the people from the industry, you get so many recommendations.
Some of them may not even be possible. But there is a vision for
10 years. First thing the Prime Minister has given us is a dream
to make us an IT super power. The present definition of this is
that by 2008 we should be able to have an export potential of $50
billion in software and $10 billion hardware. This target cannot
be achieved overnight. In the next eight months or so of the calendar
year, we are trying our level best at least to put up the task force
recommendations and implement them toward this vision.

Is this $50 billion
also a target for your ministry?

Well, I don’t look at IT as some kind of a money-making industry.
You can get $50 billion in any industry, but that won’t solve the
basic problems. I look at IT as a revolution that should help the
masses, people everywhere, in the villages. Else we will be left
with a few people who can speak English and who have access to connectivity
and TV and phones. However fast you move with the public or private
sector, I don’t think you can cover even 5% of the population of
this country in the foreseeable future. Unless
you really take IT to the masses, with services that benefit from

Such as?
Say medicine, tele-medicine. The Apollo group is starting this hospital
in a village, a 40 bed hospital, but connected worldwide. So we
want to set up role models, examples you can follow, IT yatras.
At the same time we have to find out how distance education can
be done through IT. I want more and more people at a lower level
or village level or a mass level to get involved. It should not
be only an urban upper-middle-class English-speaking revolution
in India. It should go to Indian languages too. So I think there
are a lot of things to do.

Doesn’t IT begin at
home? In your government, in your ministry?

Yes, I plan to start with my ministry. One can talk about the paperless
offices or ministries, but it has to go with the present laws in
the country. A classic example–today, the Kargil report came in,
and I wanted to place on the table of the house a CD-ROM instead
of a 2,000-page report. It takes time and lots of money to make
a 2,000-page report, with 1,000 copies for everybody. But today’s
laws talk about ‘paper laid on the table.’ It doesn’t allow a cassette
placed there. Then, after the Budget speech, I asked the Finance
Minster to give me a CD-ROM, and they gave me the disk with the
whole budget, the whole finance bill, all notifications, the whole
economic survey. So what I am trying to do is make a start with
my ministry–make it paperless.

We have appointed a small group that will look into it. Any [paper
over 60 days old will be moved to] CD-ROM. I can’t say everything
will be made paperless, because the laws don’t permit everything.
I have to sign many things [on paper]. So suppose that by August
15 we can achieve this dream and say, in my ministry if you want
anything from the records, it is available on disks and not on paper.
Then the other ministries can follow. The Parliament library has
so many books. The government has so much paper. To build a bridge
to a ‘government online’ is a big task.

What will it take?
It needs lots of training, lots of mental attitude, because it is
not that easy. Using a digital diary needs a mental makeup. First
using a diary needed an attitude change. People would remember ki
aaj itne logon se milna hai. Then they thought, it’s better to use
a diary with a pen because the paper never forgets. Moving from
paper to the digital diary needs a bigger change. So I don’t see
it as an easy job to be done tomorrow morning. But now, we have
said that any department can spend about 3% of their budgetary allocation
on IT.

Is it working?
I am finding that every department wants to do something with IT.
Slowly, this will be picked up. Now there are websites of all ministries.
I know that websites are stale, even with my ministry, that they
are not updated on a daily basis. Email is not attended to. The
automatic things are done, like ‘Thank you for the email,’ but that
is automatic and you don’t have to do anything. But they are not
answered. But as I said, it will take a little time, but I want
all ministries on the web. The systems can be put up there. But
it has to grow simultaneously with the laws available.

This 3% of spending
on IT–is this a recommendation or a mandate?

No, it can’t be mandatory, and I don’t think it should be. It is
a guideline. Once you make it mandatory, then some times I have
seen in the government that people spend on anything just to show
that they have spent. It should be need-based. If I make it mandatory,
somebody will buy Rs250 crore of computers and keep them in the

But is it a rough guideline,
or with an upper limit or lower limit?

It’s a guideline. There is no upper limit. If somebody wants to
spend 5%, that is not a problem. It is need-based. But today he
can allow this guideline to focus [his planning]. Nobody is punished
if they spend a little less or more–that’s experience and need-based.

How do you coordinate
with the state governments and their own IT initiatives? Are there
some directives?

No, there are no directives. We would like them to create the right
environment for IT. The importance of the IT industry is gradually
being recognized by state governments. Not all of them had recognized
this so far. Till today there is varied reaction from them. Chief
ministers like Chandrababu Naidu, SM Krishna and Naveen Patnaik
are directly handling IT, and giving it a special status. But some
governments don’t even have an IT minister, and they have given
[the portfolio] to some secretary. So frankly we have to bring some
kind of uniformity–not in decisions but in the importance, because
of this big computer divide between the section of society with
computers access, and the section without access. That’s not just
[socio-economic] but also geographical and other factors. And IT
should change the life of the people, not just give us a few billion
dollars. I think that there is a computer divide in India between
south and west, and east and north.

And between states?
Yes. In the west, Rajasthan has not come up much in IT. Nor Madhya
Pradesh. Gujarat has, because of its base of trade and commerce.
Maharashtra, because Mumbai is its capital, and Pune, the educational
base. Otherwise it’s basically in the southern part. But even Kerala
is weak…it has not taken up IT, though it is starting to. I
have requested the ministry there to get a park…you have 100%
literacy, so you must also have full computer literacy. So this
divide between different states should also be looked at. We are
planning some kind of chief ministers’ conference or a conference
of IT ministers. The PM’s secretary is trying to prepare a paper,
toward some kind of uniform role in IT by the state governments.

I wonder if the states
would like to be so uniform–they do compete. We assume this would
be a formal all-states event?

Yes, a one-day event inaugurated by the PM. This will be a first
move, it will create an atmosphere. And common decisions can be
taken. But this is not regimentation or homogenization. I do want
them to compete with each other. But a consistent approach is needed,
with each benefiting from the other. States like Andhra Pradesh
can show in a small pavilion what they have done…so others
can be inspired. I plan this around June, when all parliament sessions
are over.

The Union Budget came
in for criticism from the industry–some steps forward, some steps
Well, I would like to say
that the IT industry has to look into [Yashwant] Sinha’s budget
as a whole. It is unfortunate that one picks up what is not done.
Nobody sees the budget’s main thrust, the soul of the budget. If
one industry has got maximum concessions, it is the IT industry.
So my reaction to the budget is that for IT, it is very positive.
No finance minister can satisfy the trade associations 100%.

Nasscom made a representation
on several key issues: the tax on 20% of software exporters’ income,
for one, and the entry cut-off time of March 31 to the ten-year-tax
holiday club. Nasscom says that while netting Rs20 crore in revenue,
this creates a negative sentiment and an entry barrier. Where do
you stand?
Yes, there are a few issues that we put up to the Finance Minister,
with IT Secretary PV Jayakrishnan and Nasscom’s Dewang Mehta. First,
we said that we should not create–not just for the IT industry,
but for any industry–two types of regimes in the country. Where
someone has tax concessions because he applied on some date, while
everyone else has no tax exemptions. So we have suggested, as Nasscom
has, that we allow a tax holiday to a particular end-date–not to
the entry but to the exit point. The exact date doesn’t matter-2005,
2009, whatever. But whoever enters should get a tax holiday until
that exit date, just as all the existing players will. Let anybody
come at any point of time and get the benefit of the exit point.
I am hopeful that [Yashwant Sinha will consider it favorably].

What about the ESOP

The Finance Minister has a problem here. They have asked us to suggest
a foolproof scheme to avoid tax evasion. In many countries ESOP
is taxed at the entry point, not at its sale point–there are different
systems. Now, the tax authorities found that somebody in Bangalore
donated shares to the tune of Rs30 crore as a gift. So they tell
us, "We are open, but suggest a foolproof scheme so that benefits
will go to the employee, but without tax evasion." We are looking
for a way out. For example, to ban gifts of shares–that shares
cannot be gifted unless they have been sold. If we find a satisfactory
system, something can be worked out.

There was the acquisitions
issue, too.

At present, this only relates to only a couple of companies, so
this is not a big problem for the entire industry. Still we are
looking into this problem positively, because frankly, even the
people who talk about it don’t know the best answer. They start
with 10 million, then say 50 million is enough, then 100 million..

What is the value-add
the government can bring to an acquisition decision? When a company
is putting its own money in, it goes through an exhaustive process.
Can the government add value to that process?
Well, I have no problem if somebody is taking his whole money
and throwing it to the Atlantic or Pacific Ocean–it is his choice!
But it’s a problem where our forex reserves come into the picture,
and our liabilities. But we are looking at it with a positive stand.
We also understand that acquisition of an IT company requires [a
lot of funds]. So we are planning something like this: instead of
putting up some kind of a monetary limit or a number, why not go
for a percentage of ADR revenues? Let them allow, say 20 or 30%,
for such acquisition. So that bigger companies can have bigger play
and smaller companies, smaller play. As I said, the request so far
has not even come from more than a couple of companies. But we will
address it, to set a role model.

You mentioned legislation.
What is the current status of the cyber laws?

There are two things here. One is the semiconductor layout design
bill, which has been passed by the committee. It will come up to
the parliament any day now. The other is the information technology
bill, now under the consideration of the standing committee of science
and technology. I am following this up, hoping they will soon be
able to present it to the parliament. Before this summer ends, I
am sure that the cyber laws will be a directive.

There’s a convergence
wave sweeping the planet. IT and telecom have come together. Where
will India’s now-separate IT and telecom ministries be in the future?

The ideal IT ministry should include electronics, space, telecom
and broadcasting. But one must understand that looking at the giant
size of public sector entities in broadcasting and in telecom, it
is not easy to form such a ministry. Perhaps tomorrow they will
come together. But today, I don’t think that one ministry with one
minister can possibly address the issues. Technology wise, TV, telephone
and computer will come together. But we have to see the practical
issues, the geo-political situation, the large public sectors.

Specifically, the foundation
of today’s IT phenomenon is the internet. And that’s with the Department
of Telecom.

I don’t want to debate the authority for a particular issue, whether
it should be part of A ministry or B ministry. Then you end up with
ego clashes between ministries. As long as we have a solution, who
is the concerned minister really doesn’t matter. If there are issues,
we have this sub-committee of the cabinet members which can look
into them. So unless I face a grave problem of some nature, I don’t
think I will quarrel with other ministries over such things.

You did have a stint
in another of those ‘information areas’–the I&B ministry.

I was I&B minister for only six months, but what I did in six
months, the press has not realized. I was the person who started
the sports channel, which was criticized by everybody. Now, after
getting the cricket rights, they’ve got Rs500 crore. I initiated
FM radio, and people asked, "Who is going to buy it?"
Now in Delhi they got Rs50 crore, and they could be getting Rs300
to 400 crore from something which was nowhere! With no investment–the
bandwidth was there, and All India Radio would never have used it
in the next 100 years. Nobody thought about it. Just by renting
out space lying vacant in our house, we are getting this Rs1,000
crore! I may not be the minister on the spot there now, but the
country has benefited from the Rs1,000 crore.

What is your personal
use of IT? Do you use a computer at home, or a laptop?

Well, I can’t say I’m a very expert computer user. But I have a
bit of aptitude for these gadgets. Whenever something new comes
in your house, you check it out. But I don’t carry a laptop, I don’t
really need a computer with me all the time.

Weren’t all MPs given

All MPs are given a computer, according to their preferences. Some
take desktops, some laptops. There is a computer clinic here in
Parliament House, which services them. We also arrange individual
education for them. But we haven’t been able to give much attention
to this. I have been tied up because of this political turmoil,
and I am not getting breathing time. Unless things get normal, we
can’t focus on this all that much. In any case I don’t want these
people to turn into computer experts. But once they really know
how the computers can change their lives, how they can organize
their lives around it, then they will develop an interest.

So they may not be
using their computers much?

Today, I am not sure all MPs who get laptops or desktops are using
them. But I am sure that a daughter or son or someone else at home
is using it. They are certainly putting it to some use. No one has
resold his computer! And they are interested. So it will trickle
down slowly. It will be like a generation change. Instead of ‘adult
education,’ let the next generation be more savvy, as they come
in. You should always invest more money in primary than in adult
education. Adult education in computers is not very important, but
primary computer education is critical for the next generation.


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