US auto bailout plan failure not a major concern, says TCS

Tata Consultancy Services (TCS), India's largest IT services provider, has said the failure of the US Senate to agree on a financial rescue plan for the nation's struggling auto industry is not a major concern for the company, which has American automobile manufacturer Chrysler as its client.

“As an industry, manufacturing accounts for a sizeable revenue. However, we are not unduly worried about it now. This is a time when nobody is telling anything. And whatever you hear is purely a guess,” said S Ramadorai, chief executive officer of the company, at a summit organised by the Confederation of Indian Industry here.

He, however, said the IT industry growth will not be the same as last year, during which the growth rate was close to 30 per cent. He also said that as part of a cost-cutting drive, the company might defer some capital expenditure (capex) plans. The company during its annual general meeting held in July had set aside Rs 4,500 crore as capex for this year. Of this, TCS was to invest Rs 1,467 crore in equipment and Rs 3,000 crore in land.

On whether the current global slowdown is one of the worst of its kind so far, Ramadorai said: “We have seen something like this in the past as well. The recession in the 1980s, and the Internet bubble burst...but never before we have seen industry after industry getting impacted. While the respective governments across the globe have stepped in and announced fiscal incentive packages, I think it’s not just quite about money but also the sentiment to buy.”

He said that the government should look at shifting some of the responsibility of protecting the citizens to the private sector against the backdrop of the recent terrorist attacks in Mumbai.

“The private sector has a role to play in enhancing the security of the country. I also feel that technology will be key to the future security systems,” he added. He also believes that the current Arms Act in India is too stringent and needs to be relooked.

“Too many fire arms in the hand of private security can be disastrous but with the recent happenings the government needs to relook at it," the TCS chief said.