February 20, 2007Public Policy

Amartya right Amartya wrong

Yes, the IT industry has to do more for India. But not what Prof Sen says it should

This is an archived blog post from The Acorn.

Amartya Sen made a JFK-esque speech asking the IT industry what it had done for India. His point was not that the IT industry isn’t doing anything for the economy at large—he concedes that it is—but that it should do much more’. Indeed, Sen argues, given that it has benefited from the country’s contributions to its development, the industry should have a sense of obligation’ to do much more.

Sen has a point. But it’s not the one he intended to make. The IT industry’s primary obligation is to its shareholders and customers. It will be doing its bit for the country as long as it does this with efficiency and excellence. This sense of obligation’ may not even apply to state-owned enterprises and public sector undertakings who can best serve the country by sticking to their charter than by attempting to champion various good causes. Of course, corporations, like citizens may want to do good for the society they are a part of. But they have no moral or legal obligation to do so. In a country where a communal socialist government is not only unwilling to do the needful to unshackle restrictive labour laws that hurt both employers and employees but is also attempting to impose community-based quotas on private companies, the use of the word obligation must be treated with extraordinary care.

What is true is that Indian industry in general has chronically under-invested in improving the quality of governance. Industry associations like FICCI, CII, ASSOCHAM and NASSCOM have seen themselves solely as a voice of their members. In India’s political economy they are an interested party’ on various issues. Furthermore, their ability to shape government policy has been limited to the extent their most influential individual members have been able to create and exploit specific loopholes that only benefit a small number of companies. Thanks in part to the license-permit raj and its legacy, large corporate houses have found it more worthwhile to invest in fixers’ who could work on the concerned ministry rather than in broader initiatives that benefit the industry as a whole. Contrary to what Sen argues, NASSCOM has perhaps been more inclined to pursue a progressive industry-wide agenda than its old economy’ counterparts. Furthermore, there are private commercial ventures, like those that Rajesh Jain, Atanu Dey and Drishtee are working on, for instance, that seek to both address a social need and turn a profit at the same time.

But where are the think-tanks, the public policy schools, the social science research endowments and sponsored professorships? To its credit, corporate India has foundations working on setting up village schools or improving rural infrastructure. While these are commendable, they are no substitutes for the industry applying sustained pressure on government to do its job well. Running village schools and improving rural infrastructure, after all, is the government’s job. The Acorn has argued in the past that the IT industry has to find its political feet. Not because it has an obligation. But because it is necessary for its own growth and development. The externalities from doing so can far more profoundly benefit the nation than from any obligations’.

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