The Hindu Business Line : No immediate adverse impact: IT Advisor

Hyderabad, Jan. 8 The Andhra Pradesh Government does not foresee any major impact in the short term due to the financial fraud that was admitted by Mr B. Ramalinga Raju, Chairman, Satyam Computer Services.

“We are still positive about investments coming to the State. At the moment we do not foresee any negative impact due to the admission by the Chairman of Satyam,” Dr C.S. Rao, Advisor to State Government (IT), who is now in Chennai, told Business Line on phone.

He added that it was an isolated case and the law will take its own course to decide the fate of Mr Raju.

Another officer on condition of anonymity, however, said the crucial aspect to look into is how many new customers Satyam would get in the next three months (last quarter of this fiscal).

“It will also be interesting to see how many existing customers of the company will renew their contracts as a major proportion of revenues come from the renewal of contracts,” he added.

Mr Rao also said that if the company indeed had inflated its figures then there could be some impact on the overall figures declared by the State Government in terms of the IT exports.

“However, we expect to maintain the fourth place in IT exports made by States as the gap between the fourth and fifth positions is vast,” he added.

As per the State Government’s estimates, the overall software exports from the State is around Rs 35,340 crore and Satyam’s contribution is roughly around six per cent or just over Rs 2,000 crore.

Mr Rao also said that the Government did not have any plans for looking into the accounts of other IT companies as they are independent entities and the State does not believe in looking into the day-to-day running of any company.

Poll fears

A couple of Ministers in the State Government fear that with elections looming large, the Satyam episode could backfire on them.

“In the last couple of years, on various occasions, apart from projecting the initiatives in agriculture and other sectors, the Government was also projecting the huge development in the IT sector, but now with the Satyam episode being exposed, the numbers might not actually project a correct picture,” one Minister said.

More Stories on : Outlook | Software | Andhra Pradesh

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