Exit Vajpayee. Exit Karnataka’s SM Krishna and AP’s CB Naidu. This is
democracy. The people’s mandate. Can’t take that for granted.
Dalal Street did not think much of it, though. Anticipating an unstable
coalition, the stock market crashed severely.
There was similar shock in the IT industry as the poll reports came in. The
hammering of tech stocks is an old story, but the ouster of the two chief
ministers behind the rise of Bangalore and Hyderabad shook up a lot of people.
As the NDA came tumbling down, few shed any tears about the consequent exit
of “IT minister” Arun Shourie. The distinguished Shourie, in the eye
of the disinvestment storm, may have the dubious distinction of being the most
disinterested and inconsequential senior government official ever associated
with IT in India.
Now is that a bad thing? The IT industry worried, from the day the IT
ministry was born, about interference in an industry that was doing very well on
its own. The first IT minister, Pramod Mahajan, did try to set those fears to
rest. Through a mix of hands-off cheerleading, and active support when asked, he
made some positive impact on IT in India. He had good counsel (which included
the late Dewang Mehta); he was accessible, and it didn’t hurt that he’s very
Now then, tech did benefit in the last (mini) budget, duty dropping from 39%
to 19% on PCs, etc. But we don’t know what role Shourie played, for in his
entire tenure, he refused to grant a single interview to any IT publication. In
fact, he refused to even acknowledge letters or emails that we ever sent him.
Now we have a Congress-led alliance back in power. The Congress part of the
picture is well and good: Rajiv Gandhi was the original Mr Tech in Indian
politics. We don’t know of Sonia’s IT leanings, but there are tech users and
influential advisors such as Jairam Ramesh in the party: the Congress will be
pro-tech, visibly or otherwise.
The “alliance” part is more worrying, for its strong “left of
center” flavor has already made its impact. Disinvestment must slow down,
it said, and such statements pushed the Sensex down further.
We know that the big chunk of the tech industry, services exports, will not
be touched. That’s the cash cow, the golden goose. The worrying part is the
As I often point out, India’s tech superpower future status will be
seriously undermined by the shrinking domestic slice. The market was 87% of the
Indian IT industry in 1990; it dropped to 33% last year. It could drop to 31%
this year (Dataquest figures). The growing slice, of course, is services
Any impedance to the current revival of business, or to the much-hyped
e-governance plans at the Center and the states, will push us further down the
slope toward a receding market. Which, sooner or later, is bad news for all of