Agusta Case: How Michel Vanished with .₹ 135 Crore
Briton got big money from co to buy scrapped Indian choppers, but deal never happened
Rahul Tripathi & Manu Pubby
New Delhi: Where did a sum of
18 million (.`135 crore) paid to Christian Michel by AgustaWestland vanish? This was the money Agusta supposedly paid Michel for buying back discarded helicopters from Pawan Hans, the government-owned civilian helicopter operator.
But the Enforcement Directorate, investigating Michel, says Pawan Hans never sold any discarded chopper to any of Michel’s companies. ED officials told ET that they suspect the 18 million was dressed up as a service payment but may have been part of the fund set aside to grease the wheels of decision-making.
The latest figures are a clear sign that India’s largest outsourcing firms are succeeding at ‘non-linear’ growth where revenue increases rise disproportionately compared to hiring. While the numbers are good news for an industry that is trying to defend profit margins, it raises concerns over the future of hiring and the availability of engineering jobs in a sector that employs over three million people.
“What you’re seeing now is about 200,000 people being hired in the IT industry – it’s not the 4-5 lakh that they used to hire 10 years ago. And that’s because the growth has shrunk from 35-40% and the competition was for resources,” Infosys cofounder Kris Gopalakrishnan said in a recent interview. “Even now the competition is for resources, but it’s for slightly more experienced resources – people who can work on automation, artificial intelligence, machine languages, data scien- ces. So, it’s not hiring for Java coding any more.”
According to data compiled by McKinsey & Kotak Institutional Equities, India’s IT industry required about three million engineers to add the first $100 billion of revenue. However, the number of engineers required to earn the next $100 billion will drop sharply by about a third.
“The rate of hiring will slow down, but it (hiring) will continue to rise. But not at the incredibly rapid rate that we used to see because the number of people per value delivered will continue to come down,” Infosys Chief Executive Officer Vishal Sikka said in an interview after announcing fourth-quarter earnings this month.
According to experts, software firms require much fewer people to generate revenue from newer, high-paying services such as cloud computing and data analytics. They are quickly adding capabilities in these areas as low-end back-office services that came to define In- dia’s outsourcing boom through the1990s and 2000s fade into the background.
Customers such as Royal Bank of Scotland and Target are increasingly questioning the relevance of the labour arbitrage model and the industry grapples with slowing revenue growth that is also leading to lower levels of hiring.
“In the past we looked at arbitrage, we looked at headcount. It was more like ‘you're told and we will do’ versus looking at customer outcomes. Headcount is no longer a discussion — so I think it’s more about customer-centric outcomes," said Pankaj Phatarphod, managing director at Royal Bank of Scotland, which currently outsources to companies such as Infosys.
The likes of Infosys and Tata Consultancy Services are also investing in automation platforms where software bots and robots can perform commoditised IT jobs at a fraction of the cost and time it takes a human engineer.