India’s second largest software services company Infosys has not made any profit on government projects because of red-tapism and other issues, its co-founder NR Narayana Murthy said on Monday.
“I know about Infosys; there is not a single project Infosys has done — and I believe the same is true for others — where the company has not lost money. That’s a reality when dealing with the government,” Murthy told CNBC-TV18.
Delayed payments and changes in project requirements mid-stream were among the issues highlighted by the former Infosys chairman. He said government projects need to have clauses at par with international practices to ensure participation from Indian players and to make campaigns like Digital India successful.
Other issues he cited included low price, delayed payments, not accepting software on time, changing requirements mid-stream, not allocating enough time to define requirements and in some cases, corruption.
“Unless the government of India comes up with reasonably attractive and competitive set of clauses, I am not very sure if the large companies will be keen on working with the government,” Murthy said, adding that Indian companies derive 90% to 98% of their revenues from global corporations.
Murthy said the government should have a contract that is considered fair to both the government and the companies.
“Let us make sure that we are reasonable in our expectations. Let us allocate enough time of our officers to define the problem properly make sure there are no unfair penalties,” he said.
Murthy said Digital India will become a very important instrument for creating jobs.
“Digital India were to succeed if it becomes easier to work with the government, and if government were to accept the international standards of contracts in software development, and in accepting the software the company has developed, if they pay on time etc,” Murthy said.