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The paradox couldn't be starker. The tragedy can't be sadder. The Indian IT industry is treated like a pariah, by government, both at home and abroad. The Indian software industry has grown at more than 30% annually for the last 25 years. It exports to more than 60 countries and earns export revenues close to $70 billion, and serves more than half of the Fortune 500 companies. Yet when there is protectionist discourse churned out by the US government, with President Obama in his final State of the Union address lamenting about how the economy had been 'weakened' by outsourcing, we tend to become apologetic and even defensive about the industry, whereas we should be proud of the immense value it has added globally.

The world facing the Indian IT industry is getting increasing tough. The global IT spend is roughly about $1.7 trillion and that of India about $70bn. And the IT spend is rapidly decelerating, as consumption levels taper off and the West slides deeper into recession.

Any rational government would go out of its way to support its golden goose at such a juncture. But not ours. Consider the following: As per the interpretation by authorities of existing rules, IT companies cannot move resources between software technology parks (STP) and special economic zones (SEZ), including people, terming it as 'splitting and reconstruction", though there is nothing in law that prevents it! The customs department in Mohali recently went to the ridiculous extent of prohibiting the employees of an Indian IT major from crossing the street from one campus to the other of the same company, to have lunch, under this pretext!

Suppose an IT major gets an order for say $1bn and needs to assemble the appropriate human resources to execute such a project, the company cannot under prevailing law shift people from its own STP to SEZ units even though the ministry of commerce issued Instruction No. 70 dated 9/11/2010, permitting it!

By the way, the Indian software industry is perhaps the only one in the world where the rate of growth of its tax and legal professionals is perhaps as good as the rate of growth of IT professionals! This is because our convoluted systems of accountability, ensures that our income tax officials continue going in appeal till kingdom come, especially while interpreting Section 10AA of the Income Tax Act, for they work with the standard operating procedure that every company is a thief and is guilty until proven innocent perhaps only when done by a full bench of the Supreme Court. Not to mention the huge costs, delays it imposes on our IT industry, which make us uncompetitive viz., it encourages even tiny upstarts like Philippines to strut about in front of India with new-found attitude and we send the signal to the world that the investment climate in India means you fight with every limb of your body in chains.

So both at home and abroad, the Indian IT industry is an outcast for the country whose companies it serves admirably and for the country, for whom it is an unmistakable jewel in the crown.

Let's look at what the data says. Jacob Kirkegaard of the Peterson Institute in a seminal paper examined the impact of the growth of Indian offshoring industry on the service sector labour markets of US, EU and Japan and concluded that the impact was 'negligible". Yet the unwanted brouhaha and protectionist postures by the US government suggests that the lesson that the Japanese carmakers taught them years ago has been forgotten. It concludes that less than 5% of the major layoffs in the US in 2004-05 was because of IT outsourcing. The US bureau of labor statistics counts about 1 million workers in a workforce of about 150 million fired in major layoffs.

Then we have the minimum alternate tax (MAT). Here we don't even rob Peter to pay Paul. We rob both Peter and Paul. MAT imposition has virtually ruined the SEZ policy for IT exports (which exempted income tax on profits from exports) just when the industry starts reaping its benefits. A direct tax code with new incentives is expected.

The time has come for the government, both Centre and state, to rise to the occasion, and support the Indian IT industry in letter and spirit, at one of the most difficult moments in the history of India's software industry. It must learn from the wise words of Lord Denning when he famously said "the Doctrine of Precedent does not compel your Lordships to follow the wrong path until you fall over the edge of the cliff. As soon as you find that ... to retrace your steps. And that is what I ask your Lordships to do."

Let India not forget that the IT industry has played a huge role in arresting the secular decline of India's global image as a land of snake charmers and beggars and has given us a place of pride on the world stage.