Saturday, February 9, 2008
Nothing Ethical About It! Back To IIPM !
It’s more than a year since I wrote last about IIPM and its ploys. I even thought of ignoring IIPM as certain people and institutions are incorrigible, whatever happens.But I sincerely thought that BT, claiming to be the No.1 business magazine will not stoop to conquer ( to make money).BT dtd February 10, features an ad from IIPM(page 79)which gives the “EDP CALENDAR 2006-07 ASIA” detailing ‘World Class EDPs For India Inc’.The ad starts with “The following professors exclusively visiting IIPM to take classes, will be additionally taking Executive Development Programmes for India Inc.as per the following calendar” (italics added).Then it gives the details of the programmes starting from April ‘06 and ending with Dec ’07. Not even a single programme has been scheduled for 2008! Usually a Calendar of Events are prepared for the next year- like an academic calendar at a business school will give you schedules for the next academic year –it never tells you about the past events. Business Schools invariably teaches business ethics as a subject but how can an institute which resorts to blatant violation of ethical principles inculcate ethics and values in their students? IIPM has been resorting to these apparently unethical methods to further their interests. But what about a respected business magazine like BT which claims to be the No.1 business magazine in India carrying such misleading ads? How could a highly respected company like 3M support the same?(The ad shows Post-it, a brand of 3M as a supporter )
Monday, February 4, 2008
Shall I continue to subsidize companies like TCS, Infosys, Wipro or Satyam and their shareholders and employees?
The profits earned by the export of software from India have been exempted from IT ever since the section 80 HHE of the IT Act(1961) was introduced in 1991. Initially, such an incentive to encourage exports was necessary as we wanted foreign exchange very badly as our reserves had fallen to abysmally low levels. Thanks to the incentives, the software exports took off very rapidly, and has emerged as one of the happening sectors and major earners of foreign exchange during the past sixteen years or so. The foreign exchange reserves have since jumped from those perilous levels to very comfortable levels and economists and social scientists have started probing the various uses to which these bulging reserves can be put.
While the strength of FE reserves gives us lots of confidence, has it been really helpful in reducing the social imbalances like inequality of income, eradication of poverty etc?Who benefits from such incentives? Companies like TCS, Infosys, Wipro etc each report profits in the vicinity of a billion dollar a year.Who are the beneficiaries of this profit? Barring contributions made by these companies towards social responsibility activities, these profits and the extra profits due to the IT exemption get distributed among the company’s promoters, shareholders and employees who happen to be among the super rich, or high net worth individuals or employees who have already been paid handsomely in the form of tax free dividends or very high salary packages. The benefits of the tax exemptions mainly go to a limited number who are already better off than the rest of the members of the society. Shall we continue to encourage this practice? If these three or four companies were to be taxed at the normal rates, something in excess a billion dollar would have been available to the society to improve the bare necessities of lakhs of people. While the GDP would have shown the same level of improvement, a larger number of members of the society would have had the benefit of consuming the same thing which a few members would otherwise would do. The current scenario will only help in widening the gap between the rich and the poor. Even I, a middle class citizen would have benefited from the amounts these companies would have paid by way of tax. As it stands , I have, in effect, been subsidizing these bigger companies who don’t get taxed despite being immensely profitable where as I get taxed at the normal rates for whatever salaries I struggle to earn.
While the strength of FE reserves gives us lots of confidence, has it been really helpful in reducing the social imbalances like inequality of income, eradication of poverty etc?Who benefits from such incentives? Companies like TCS, Infosys, Wipro etc each report profits in the vicinity of a billion dollar a year.Who are the beneficiaries of this profit? Barring contributions made by these companies towards social responsibility activities, these profits and the extra profits due to the IT exemption get distributed among the company’s promoters, shareholders and employees who happen to be among the super rich, or high net worth individuals or employees who have already been paid handsomely in the form of tax free dividends or very high salary packages. The benefits of the tax exemptions mainly go to a limited number who are already better off than the rest of the members of the society. Shall we continue to encourage this practice? If these three or four companies were to be taxed at the normal rates, something in excess a billion dollar would have been available to the society to improve the bare necessities of lakhs of people. While the GDP would have shown the same level of improvement, a larger number of members of the society would have had the benefit of consuming the same thing which a few members would otherwise would do. The current scenario will only help in widening the gap between the rich and the poor. Even I, a middle class citizen would have benefited from the amounts these companies would have paid by way of tax. As it stands , I have, in effect, been subsidizing these bigger companies who don’t get taxed despite being immensely profitable where as I get taxed at the normal rates for whatever salaries I struggle to earn.
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