Bangalore: Nandan Mohan Nilekani, 54, co-chairman of Infosys Technologies Ltd, India’s second largest software services firm, resigned from the board of the company he co-founded to join the government as chairperson of the Unique Identification Authority of India an agency working on a project to give every Indian a unique identity card, similar to the social security number in the US.
The authority, whose creation was approved by the government in November, will work on giving every citizen an identity card. Initially, every voter on the current electoral roll, a reasonably comprehensive list of people over 18, will get a unique number in the project. The agency will progressively add others, including those who are younger.
Over a period of time, through fail-safe procedures backed by intensive use of technology and with the help of multiple government agencies, the currency and comprehensiveness of the database will be perfected and photographs and biometric data will be added progressively to make the identification foolproof, the government said in November.
New calling: Nandan Nilekani, whose new position carries the rank of cabinet minister, will work with the Planning Commission on the project which will cover around 1.2 billion people—the largest in the world. Hemant Mishra / Mint
Nilekani, whose new position carries the rank of cabinet minister, will work with India’s apex planning agency—the Planning Commission—on the project which will cover around 1.2 billion people—the largest such project in the world.
The government had announced Rs100 crore for the authority to be set up, but there are no clear estimates on the cost of the project which could run into thousands of crores. “The Unique ID project is a transformational project for the country as it will overlay many underlying projects, creating huge efficiencies for the country leading to enhanced governance and reduced costs,” said Som Mittal, president of software industry lobby Nasscom, in a statement.
It will also mean big business for companies such as Tata Consultancy Services Ltd and Infosys Technologies Ltd, that are aggressively looking for local and government business to offset a slowdown in the US, the main market for Indian IT services firms.
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“If it is a business proposition, we will evaluate and take the appropriate decision,” said M. Sudhir, spokesman for Mahindra Satyam, now majority owned by Tech Mahindra Ltd.
A spokesperson for Wipro Ltd said it was too early to comment. A TCS spokesperson said the company participates in government projects and would examine taking part based on the project.
Infosys chief executive officer S. Gopalakrishnan said it was premature to comment on the company’s participation, but added that it was indeed looking at government projects. Although Nilekani has resigned from the board of Infosys, he still continues to remain a shareholder in the company. Gopalakrishnan said that “given that (both) Infosys and Nandan have valid checks on integrity, if it comes to that (conflict of interest if Infosys bids for the project), we will see to it is addressed.”
Nilekani’s resignation would be effective on 9 July, Infosys said in a statement. “As a company that has always put the interest of society ahead of itself, Infosys will accept his absence with a sense of duty to a larger cause, but with deep sadness at the departure of one of her most illustrious sons,” said N.R. Narayana Murthy, chairman and chief mentor of Infosys and a close associate of Nilekani for close to three decades.
Unlike the US, where business leaders routinely accept appointments in the government, few Indian executives go on to work for the government. While numerous businessmen such as Vijay Mallya, Sajjan Jindal, Rahul Bajaj and Rajeev Chandrasekhar have entered politics and and have become parliamentarians, very few have worked in executive capacities in the government.
“I hope it is a beginning of a trend. Business in this country is not looked upon as the source of public service. It is linked with profiteering and private gain and it is all illegal. This should change,” said N. Balasubramanian, chairman of centre for corporate governance and citizenship at Indian Institute of Management, Bangalore. “Nandan’s resignation from the board reduces conflict of interest. Very few industrialists (in public office) take that view.”
Nilekani’s exit comes at a crucial time for the company. The ongoing slowdown in the US and Europe has meant that Infosys’ customers have cut back on their IT spending.
Infosys has projected that in the current year its revenues will be between Rs22,066 crore and Rs22,098 crore, a marginal 1.7-5.7% growth, against the 30% growth in its revenue to Rs21,693 crore for fiscal 2009.
Infosys was only the second company for which Nilekani worked.
Son of a textile mill’s manager, Nilekani graduated as an electrical engineer from IIT Mumbai and met Infosys’ other co-founders while working at Patni Computers Ltd. In 1981, along with six other co-founders he launched Infosys. In the initial years, the suave and articulate Nilekani spearheaded the operations of the company in the crucial North America market and was based in the US. In 2002, he took over as the chief executive officer of the company from Murthy when the industry was struggling to grow post the dot-com bubble. It was under his leadership that the company crossed a billion dollars in revenue.
In 2007, he decided to hand over the chief executive officer’s baton to another co-founder Gopalakrishnan. Since then, as co-chairman, he has been involved in providing strategic inputs to further the company’s growth. In the recent past he has been travelling across the globe to meet large customers of Infosys, drum up new business and to strengthen the company’s brand. He also authored a best-seller, Imagining India.
“(I am filled) with mixed emotions. I have known him for 31 years. However, the board will meet (shortly) to distribute among others the executive responsibilities which he used to (handle). While we will miss him, Infosys has a deep bench,” said Gopalakrishnan.
The board of Infosys is to meet on 10 July.
Though this is the first time that Nilekani has agreed to serve in the public domain full time, in the past he has contributed to public policy in various capacities. From 1999 to 2004, he was the chairperson of the Bangalore Agenda Task Force created by then chief minister of Karnataka S.M. Krishna to attract business to and enhance the civic infrastructure of Bangalore.
He is the right person for the ID project, said Sabyasachi Satpathy, director of Mindplex Consulting, an outsourcing advisory firm. Satpathy added that especially given the slowdown in other markets, the project would attract global information technology companies, too.