Perot pips Wipro, TCS in race for BearingPoint unit

MUMBAI: The world may have seen a slowdown in cross-border M&A deals due to the recession, but the software sector is witnessing a frenetic pace of consolidation globally.

In a closely-fought bid that was kept under wraps, two large Indian companies — Wipro and Tata Consultancy Services — made independent efforts to acquire the European business of software major BearingPoint, but only to be pipped by the US-based Perot Systems which emerged as a front-runner.

BearingPoint Europe is currently valued at more than $700 million — about Rs 3,360 crore at current exchange rates — and would have been one of the largest out-bound acquisitions by the Indian software industry, in more than a year.

The move follows the completion of the acquisition of BearingPoint’s North American, Japanese, Chinese and Indian businesses by PricewaterhouseCoopers, as the consulting firm wanted to have a strong presence in emerging markets.

Both Wipro and TCS have denied any such move to acquire BearingPoint. However according to people close to the development and bankers involved in the exercise, the two Indian technology giants had been keen till the second stage of the acquisition process and had also accessed BearingPoint’s data room before opting out of the race due to valuation issues.

The 100-year-old BearingPoint is one of the world’s largest management and technology consultants, which was spun off as a separate firm from KPMG in 1999, but slipped into bankruptcy two years ago. Large consulting businesses have already bid and won parts of the large organisation that has a strong presence in not just the developed world, but also in emerging markets.

The European business has been a prime target for established Indian software firms. Indian service providers, which still get a majority of their revenues from the US, have been intensifying efforts to expand their client base in regions, including continental Europe.

“As usual, we do not comment on market speculation,” a TCS spokesperson said in response to an ET query. A Wipro spokesperson said: “We will be unable to comment on market speculation.”

TCS recently acquired the India-based BPO arm of Citigroup, Citigroup Global Services, for $512 million — about Rs 2,457 crore. BearingPoint provides management and technology consulting services. Even as recently as December, it was reported to have won a $250-million — about Rs 1,200 crore — contract, despite being wobbled by financial woes.

Both Wipro and TCS have been far more aggressive than the other software major, Infosys. When queried about its interest in BearingPoint, a Wipro spokesperson said: “We will be unable to comment on market speculation.” Wipro's largest acquisition to date has been that of the US-based Infocrossing for $600 million — about Rs 2,880 crore today.

“My reading is that the acquisition may have been too large for the Indian players to swallow. They were interested, but only in parts of BearingPoint's Europe businesses and not the whole firm,” said one banker on why TCS and Wipro could have dropped out.

While PricewaterhouseCoopers completed its part acquisition of BearingPoint in June, in May, another consulting firm, Deloitte took over the public services business of BearingPoint for about $350 million.

India heads in wrong direction with new budget

WASHINGTON: A US South Asia expert suggests that the Indian budget would perhaps limit the country's ascension to a global economic force and could limit the value of India-US partnership for Washington.

As Secretary of State Hillary Clinton has noted in advance of her trip to India, the US has an important stake in Indian success, writes Derek Scissors, research fellow in Asia Economic Policy at The Heritage Foundation.

"As its clout on the world stage increases, India can play a stabilising role in the broader Asia region, partnering with the US on a range of issues including maritime cooperation, nuclear non-proliferation, education, science, and defence trade," he writes.

"India also serves as a powerful example of a successful democracy in the developing world. On the economic side, unlike many of its Asian counterparts, India is consumption-driven, not export-driven.

"Its growth and greater prosperity therefore offer outstanding opportunities for American agriculture, industry, and services," he says. "The flip side of America's stake in India is that America loses when India takes a step backward."

That seems to have happened with the anxiously awaited Indian government budget for the next fiscal year, which puts political gain over long-term economic progress, Scissors suggested.

"This kind of fiscal irresponsibility may help India's ruling Congress party win more elections, but it will not help the country live up to its economic promise," he said.

"The budget in general will have pernicious long-term effects. The huge deficit is a heavy tax on the future that lowers India's growth trajectory. But there are additional devils in the details, in particular with regard to education and liberalisation."

For most of this decade, India thrived, benefiting tremendously from earlier liberalisation, which, among other things, drew large inflows of foreign investment, he said. But "now India is heading the wrong way on the economy".

The US-India relationship is multifaceted and can certainly thrive based on political affinity and geostrategic considerations, Scissors said.

"But the direction that Congress has set for the past five years, topped off by this budget, is going to slow and perhaps limit India's ascension to a global economic force. That could limit the value of the (US-India) partnership."

Inside The Great American Bubble Machine

Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression

MATT TAIBBI

Posted Jul 02, 2009 8:38 AM

In Rolling Stone Issue 1082-83, Matt Taibbi takes on "the Wall Street Bubble Mafia" — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good." Taibbi shot back: "Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it." Here, now, are excerpts from Matt Taibbi's piece and video of Taibbi exploring the key issues.

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.

It sounds obvious now, but what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman's later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry's standards of quality control.

Goldman's role in the sweeping global disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren't in IPOs but in mortgages. By now almost everyone knows that for decades mortgage dealers insisted that home buyers be able to produce a down payment of 10 percent or more, show a steady income and good credit rating, and possess a real first and last name. Then, at the dawn of the new millennium, they suddenly threw all that shit out the window and started writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.

And what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help — there were other players in the physical-commodities market — but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

The history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates. By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden-parachute payments as his bank was self-destructing. There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman.

But then, something happened. It's hard to say what it was exactly; it might have been the fact that Goldman's co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. While the American media fell in love with the story line of a pair of baby-boomer, Sixties-child, Fleetwood Mac yuppies nesting in the White House, it also nursed an undisguised crush on Rubin, who was hyped as without a doubt the smartest person ever to walk the face of the Earth, with Newton, Einstein, Mozart and Kant running far behind.

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliché that whatever Rubin thought was best for the economy — a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline the committee to save the world. And "what Rubin thought," mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. During his tenure at Treasury, the Clinton White House made a series of moves that would have drastic consequences for the global economy — beginning with Rubin's complete and total failure to regulate his old firm during its first mad dash for obscene short-term profits.

After the oil bubble collapsed last fall, there was no new bubble to keep things humming — this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers — one of Goldman's last real competitors — collapse without intervention. ("Goldman's superhero status was left intact," says market analyst Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bank-holding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding — most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs — and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.

Converting to a bank-holding company has other benefits as well: Goldman's primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman — New York Fed president William Dudley — is yet another former Goldmanite.

The collective message of all of this — the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds — is that when it comes to Goldman Sachs, there isn't a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. "In the past it was an implicit advantage," says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. "Now it's more of an explicit advantage."

Fast-forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs — its employees paid some $981,000 to his campaign — sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Cognizant beefs up testing business

R. Ragu

IZONE launch: (From left) Ms G. Sumithra, Senior Vice-President, Testing Practice, Cognizant; Mr Mohammad Zahoor, IT Director, PEMCO Insurance; Mr Allen Shaheen, SVP; Mr Partha Iyengar, V-P, Gartner; and Mr R Chandrasekaran, President and MD, Global Delivery, at the IZONE launching programme at Siruseri near Chennai on Thursday. —

Our Bureau

Chennai, July 9 Cognizant Technology Solutions has increased its employee strength in software testing practice by ten times to around 9,000 people in the last four years. Nearly 75 per cent of the testing staff are sited in India and the rest at various locations, including Europe and Latin America.

Software testing practice is one of the fastest growing businesses for the US-based software company with offshore centres in India. While software testing is still considered a ‘secondary’ choice among students, Cognizant takes nearly 50 per cent of students from non-engineering disciplines and trains them for six weeks on the testing practice. These employees move quickly to the second level and are on par with any other software professional.

The company established software testing as a business unit in 2001 and ramped it up to around 900 employees in 2005. Today, it is an independent testing unit with its 9,000 career testers, testing code written by the company as well as by third-parties such as clients and competitors. Over 75 per cent of the software code tested by Cognizant is provided by client or third party vendors who would have developed the software application, according to Ms Sumithra Gomatam, Senior Vice-President.

Cognizant does functional testing (for example performance of an ATM); specialised testing (test the performance on security, load and automation) and consultancy (help clients on testing). The company has more than 200 business analysts recruited from premier business schools in India who bring in the required domain expertise on testing engagement, she told newspersons at the newly built Siruseri campus that has a dedicated testing centre.

Innovation centre

Cognizant has launched its platform, IZONE, that will foster innovation and enable the company to deliver greater value in the area of testing. The platform was inaugurated by Mr Mohammad Zahoor, IT Director, PEMCO Insurance, a Cognizant client in the testing practice.

The platform will facilitate “ideation, catalyse knowledge sharing and showcase testing innovations that help reduce testing effort, time and cost, while improving quality,” said Mr Allen Shaheen, also a Senior Vice-President, Testing Practice, Cognizant.

Capgemini hires Satyam honcho

Capgemini, the France-based information technology outsourcing and consulting major, has thrown its hat in the ring for domestic IT outsourcing and consulting business deals.

IDC, the market intelligence tracker for the sector, estimates the domestic IT services market, currently around $6 billion (Rs 28,800 crore), will touch around $13 billion (Rs 62,400 crore) by 2012. It is this growth potential that has made frontline Indian companies like TCS , Infosys , Wipro and HCL Technologies look inwards for growth.

The $12 billion Capgemini, whose current revenue from India is negligible, is now ready to give the home-grown majors a run for their money by playing a bigger role in the India market with its high-end consulting and outsourcing capabilities.

To strengthen its case, it is believed to have hired SatyamComputer's Ranjan Tayal, as vice-president and head of India business. Tayal, till recently, was driving close to 4 per cent of Satyam's revenue for the past four years as the Vice President and Business Head for India and South Asia.

Capgemini was in the news earlier this year as a possible contender to acquire fraud-hit Satyam, though the company had denied it. With over 90,000 employees in 36 countries, it is spoken of in the same breath as IBM and Accenture in global IT consulting. It has over 20,000 employees in India, which it aims to double in a year, but they cater to global clients.

A Mahindra Satyam spokesperson confirmed that Tayal has quit the company. "Yes, he was holding fort for India. But the transition is already in place," he added. Atul Kanwar from Tech Mahindra has moved into Mahindra Satyam as head of business development and operations for the regional business groups (Europe, Australasia, Middle East, Africa and India).

Satyam had seen a spree of top-level exits in the recent past, including it's engineering services head, T S K Murthy, automotive and manufacturing practices head, Subu Subramanian and Deepak Nangia, its head in Australia .

Satyam taking back shaky staff

Niharika Jaiswal ,who had been part of a 8,500-strong pool of surplus work-force kept in suspended animation after the fraud that mauled Satyam Computer Services, has been asked to join back Mahindra Satyam, the born-again version of the Hyderabad company.

The entire pool may soon find itself back on the company’s rolls.

Jaiswal, a 24-year-old software engineer, is one of the 1,100 employees who have been taken back by the company after it created the half-way house as a prelude to possible layoffs aimed at cutting costs.

Last month, the company had decided to put 8,500 employees who were considered ‘excess’ on a ‘virtual’ bench for four to six months. However, with the growth of the business, many more employees are expected to be called back to work.

"Around 1,100 associates have been placed already and depending on the business prospects we hope to call back or redeploy all those who were put on the virtual pool. Those with required skill sets and technology background will be preferred," Sridhar Maturi, head, media relations at Mahindra Satyam told Hindustan Times.

The government is also closely monitoring the situation.

“A large number of staff has been recalled and it is a clear indication that Satyam wants to retain as many people as possible,” Corporate Affairs Minister Salman Khurshid told Hindustan Times, adding that the situation is being monitored.

Infosys’ revenues from BT to shrink further

Cost-cutting, vendor consolidation at BT.

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“We have a basket of clients and if someone falls, someone else grows. The important thing is to have a portfolio which would allow us to handle such transitions better.” – Mr V. Balakrishnan.

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Vishwanath Kulkarni
Shamik Paul

Bangalore July 12 Infosys Technologies Ltd said revenue contribution from its largest client could come down further as British Telecom Plc looks to keep costs under control fighting a recession and consolidate its IT vendor base.

Revenues from BT have more than halved for Infosys over the past six quarters as the telecom firm has reduced volumes and also due to the adverse impact of cross currency movements. For the latest quarter, BT accounted for about 4.5 per cent of Infosys’ revenues as against a high of 10.3 per cent in quarter-ended March 2008.

“It (revenues from top client) could come down further,” said Mr V. Balakrishnan, Chief Financial Officer, Infosys. “We don’t know how the vendor consolidation exercise will shape up. Even if it comes down we do have other clients that will compensate,” Mr Balakrishnan added.

However, Mr Balakrishnan clarified that though the revenues from the top client fell below five per cent for the first time, it has not impacted Infosys’ growth significantly. “This implies that we have a basket of clients and if someone falls, someone else grows. The important thing is to have a portfolio which would allow us to handle such transitions better,” Mr Balakrishnan added.

Revenues from BT, which exceeded $300 million for the past 12 months, have now fallen to over $200 million on LTM (last twelve-month) basis. For the June quarter, BT contributed $50.49 million to Infosys’ total revenue of $1,122 million.

Sources said BT might manage certain jobs internally, which would have a dent on outsourcing. Another factor that could lead to work drying up was that the company might not need certain services from the IT vendors.

Despite the decline in BT contribution, earnings from the telecom vertical increased marginally for the June quarter to 16.9 per cent of the total revenues from 16.7 per cent in the March quarter. BT contributed some 5.7 per cent of total revenues in the March quarter.

3 large deals

Infosys won three large deals in the June quarter including one from Telstra, the Australian telecom firm. As part of its vendor consolidation exercise, Telstra chose to work with Infosys as one of its key partners to support its A$450-million contract for application, development and maintenance.

Infosys to hire 100 in Australia

Infosys confirmed today that it intended to hire 100 staff in Australia over the term of its financial year.

The positions would be senior and middle level roles, according to a spokesperson for the company, but there was no information on where exactly those roles would be based. Infosys has offices in Melbourne, Sydney and Brisbane.

Infosys just won a deal with Telstra for application development and maintenance. The work, which Infosys would share with EDS, was worth US$450 million, of which EDS said it had netted US$190 million.

The contract was mentioned in the company's global financial results for the quarter ending 30 June, released last Friday. The company's revenues for the quarter had declined 2.9 per cent year on year. The Infosys financial year started in April and ends in March.

Nilekani bids tearful adieu: Infosys' loss is India's gain

Bangalore - IT bellwether Infosys Technologies gave a tearful send-off to its co-chairman Nandan M. Nilekani, who marked an end to a 28-year-long stint in the company by accepting the government's offer to head its ambitious unique identification number project of issuing national identity cards to one billion people.

Nilekani, one of the seven founders of Nasdaq-listed Infosys, which started in 1981 with a loan of $250, has seen the technology outsourcer's staff strength grow from 20 in 1981 to 103,905 in the last quarter.

"I am generally very articulate but this is not the day or place where I can be articulate. I've been wrapped up in Infosys for 28 years. My only identity is Infosys. I will be going to lead a program to give identity to every Indian. But today I am losing my identity," Nilekani said in an address to 20,000-odd Infosys employees in the company campus in Bangalore's Electronic City on Thursday.

"So far I have been identified because of Infosys. My identity is because of Infosys. From tomorrow I don't have an identity even though I am suppose to give identity to a billion people because I cannot say I am Infosian," he said.

Recalling the early days of Infosys, Nilekani expressed his gratitude to other Infosys co-founders, especially Infosys chief mentor N.R. Narayana Murthy who gave him "his first job."

"He gave me the first job. Then, when he started Infosys, he invited me to join as a co-founder," Nilekani said.

Nilekani said it was difficult for him to say goodbye to Infosys, which made him what he is today, but public service had always been his "lifelong calling" and he was leaving Infosys for a "greater cause."

"It has been a difficult and gut wrenching decision to make as I have been a part of the Infosys family for almost 30 years and it's the only life I have known. I firmly believe my learning and experiences at Infosys will help me pursue and contribute to a larger cause and I am thankful to each of you for making this journey so special," he said.

"This was an offer I could not have refused. The cause here is so large that it is worth leaving my comfort zone. The Prime Minister has mandated me to roll out UIDs benchmarked to the best in the world," Nilekani said.

His ambition, he said, was "not to be on the board of any company. Also, because my father was a huge public service guy. My uncle was also in this domain. And here I am, heading to it," he said.

However, the former chief executive of Infosys said he was well aware of the challenges associated with new role. "I am leaving an organized world. Here, standing at the top of an abyss, even if I were to fall, I may find water. But, in my new role, I'm supposed to work with 600 government departments knowing fully well that no two government departments get along with one other," Nilekani, who received from other co-founders, a white-and-blue jersey with Infosys written in the front and number 2 in the back, said.

According to Infosys co-founder and chief mentor N.R. Narayana Murthy, everyone in Infosys would be sad to see Nilekani go. But they are proud that an Infosian has been tapped by the government to head its ambitious project of issuing national identity cards to one billion people. "Ideally, we would all have liked him to continue till he was 60. That is the year in which he had to retire. But realizing that he is very passionate about getting into a new orbit, realizing that his heart was in making a difference to a larger number of people in the country, we all felt that we should encourage him," Murthy said.

According to Murthy, Nilekani is the right man to head the government's ambitious project as he is a "big picture man."

"He is a wonderful networker. He understands technology and technology policy. He is a middle-of-the-road person, he is a consensus builder, and he has a very pleasant personality. So I would think that it is an excellent choice," Murthy said.

However, Murthy feels sorry for Nilekani as the "poor fellow is going from an enlightened democracy, from a synthetic place like Infosys where everything is ordered and ordained to be in a particular way into a place where there is lot of chaos, where there is a lot of conflicting interest, where there is a lot of vested interest, where consensus building is not easy."

Murthy's colleagues Kris Gopalakrishnan and T.V. Mohandas Pai, however, have no doubts that Nilekani will excel in his new role.

According to Gopalakrishnan, who took over from him as CEO of Infosys, Nilekani is a wizard at getting things done. "You'll never find anything in his inbox. If you give him any work, he will delegate it so well that it will go off to the outbox. How he delegates, no one knows," Gopalakrishnan said.

Agrees Pai, board member and head (HRD and Education & Research), Infosys. Pai, who swears by Nilekani's sharp wit and elephantine memory, said he was left amazed several times by his great networking abilities. Also, "If Narayana Murthy is to be convinced, only Nandan can do it. How he does it, no one knows," he said.

Indeed, from the time of carrying his first computer on his lap as a precious possession when traveling from Mumbai and Bangalore to being the chief of the Unique Identification Authority of India (UIDAI), Nilekani, 54, has come a long way.

Meanwhile, a senior government official, on condition of anonymity said the government would take all steps to ensure that Nilekani finds his new responsibility a pleasant experience.

"We have zeroed in on Vigyan Bhawan annexe and Jeevan Bharati building in Connaught Place. The Vigyan Bhawan annexe is especially close to other government offices. We are planning to set up Nilekani's new office in Vigyan Bhavan. His staff will be accommodated in Jeevan Bharati building where two floors with around 20,000 sq feet space has been identified," the official said.

The Vigyan Bhawan space was used by Liberhan Commission for 17 years and was vacated recently after the panel submitted its report into the Babri masjid demolition to the government.

"We will make Nilekani's office as hi-tech and technologically equipped as desired by him. The cost involved is not going to be a problem," the official said.

The Urban Development Ministry has also identified a sprawling Type VIII bungalow in Lutyens Zone for Nilekani, who has been given Cabinet rank, the official said, adding that to the government's prime concern is to make Nilekani as comfortable as possible, considering the challenging task assigned to him.

Indeed, the ambitious project of issuing an identity card for every Indian will be a Herculean task. Till date, all the ration cards, PAN cards, voter cards and job cards issued so far by government agencies have been full of leakages and gaps and many times media have reported that these cards were issued to people, who do not exist and there are many who have never received them.

Implementing a smart card will also require legal clearance from many government departments. This will make one integrated database. The room for error should be minimum to carry out operation of this magnitude. Even a five percent error will mean almost 50 million records being matched incorrectly.

"The IDs will form the base of a multi-applications smart card system that can be used to empower the poor and ensure that they get the full benefits of all programs such as the rural employment guarantee program, public distribution system, education, skill development, health services, social security, fertilizer subsidy, solar lanterns, solar cookers, etc," the government official said.

"The card with a 16-digit identification will gradually replace other ID cards now in use, such as the driving licence, voter ID card, and the permanent account number card. It will be a smart card with 16kb memory. The card will also have cyber security features to make it tamper-proof and cloning-proof," the official said.

"The project envisages preparation of a computerized national register of Indian citizens which will be updated by linking it to birth and death registration offices. The updating will also include changes in address, marital status, name and other details," he said.

"The number will remain the permanent identification from birth to death of an individual. In the beginning, the number will be assigned to each person on the current electoral rolls. Subsequently, others, including those below 18 years of age and thus not on the voter list, will be added," he added.

According to the Planning Commission Deputy Chairman Montek Singh Ahluwalia, the scheme would be the largest such unique identification system in the world. ''It is high priority for the government and can eliminate the need of multiple cards. The unique ID card will help citizens avail basic government services. We will start testing these on a pilot basis in a year,'' Ahluwalia said.

Nilekani is likely to formally join his new assignment on Monday with his select team, which is yet to be announced.

The Ministry of Planning has allocated Rs.120 crore for UIDAI, which is expected to roll out the first card in the next 12-18 months.

Shares in Infosys Technologies, valued at more than $20 billion, closed 2.97 percent higher at Rs.1726.50 at the Bombay Stock Exchange on Friday.

About Nandan M. Nilekani

Nandan Manohar Nilekani's journey with Infosys began in 1978, even before Infosys was formed, when he joined Patni Computers after graduating from IIT Bombay and began working under N.R. Narayana Murthy. Three years later, in 1981, Infosys was born under the leadership of Murthy and the other co-founders - S. Gopalakrishnan, K. Dinesh, N.S. Raghavan, N.M. Nilekani and S.D. Shibulal - who had borrowed $250 from their spouses. The team worked hard to build Infosys through the 1980s and the 1990s.

Prior to being made CEO and managing director of Infosys from March 2002 to June 2007, Nilekani previously held the posts of the president and COO and under his leadership, Infosys' global delivery model became mainstream and the company's revenues grew from Rs.3604 crore to Rs.13,893 crore and the headcount scaled up from 10,700 people to over 72,000.

In 2004, Nilekani was awarded the Padma Bhushan, the third-highest Indian civilian decoration and in January 2006, Nilekani became one of the youngest entrepreneurs to join 20 global leaders on the World Economic Forum (WEF) Foundation Board.

Known as the man who helped Thomas Friedman discover a phrase to describe his globalization treatise of a flat world, Nilekani was in 2006 listed as one of the 100 most influential people in the world by Time magazine.

Nilekani, who played a key role in drawing a new profile of the "India Everywhere" campaign organised by the Confederation of Indian Industry (CII) at the World Economic Summit in Davos in 2006, has reportedly been handpicked by the prime minister to head the new entity (UIDAI) in recognition of his contribution to the Jawaharlal Nehru National Urban Renewal Mission and other related areas of public policy.

Nilekani, who has an estimated net worth of $1.3 billion, is a co-founder of India's National Association of Software and Service Companies (NASSCOM). He is also the chairperson of the Bangalore Agenda Task Force (BATF).

Police hand in Shopian murder case: report

The commission probing the rape and murder of two women in Shopian town in south Kashmir on May 30 has recommended that the five officials suspended after the crime be booked as accused, Jammu and Kashmir Finance and Law Minister Abdul Rahim Rather said on Friday.

"The commission has recommended that the four police officers and an officer of the forensic laboratory should be booked as accused in the FIR filed in the rape and murder of the two local women in Shopian," he said, making public the final report of the one man judicial commission that probed the incident. The commission's interim report had held these officials guilty of destroying evidence.

"The commission has said that a separate case should also be filed against the then superintendent of Shopian for giving false evidence before the commission," the minister told media persons. Chief Secretary S S Kapur, Financial Commissioner (Home) Samuel Verghese and Director General of Police Kuldeep Khoda were also present.

Rather said the commission had submitted its 150-page final report on July 7.

In his findings, Justice (retired) Muzaffar Jan, who conducted the enquiry, said conclusive evidence to identify the culprits had not been brought to the knowledge of the commission, but the involvement of some personnel of the special task force and local police could not be ruled out.

The finance minister also mentioned the directives of the state high court, which had sought the appointment of an officer of the rank of inspector general of police to head the special investigation team (SIT) probing the rape and murder of the two women.

"Farooq Ahmad, inspector general of police (CID) is an officer of proven integrity and professional competence. He has been asked to speedily complete the investigations so that whosoever is involved in this heinous crime is brought to justice," Rather said.

The government has also appealed to the people of Shopian to co-operate with the SIT so that it can complete the investigations promptly.

Following the interim report by the commission on June 15, the state government had suspended four police officer, the then Shopian district police chief, one deputy superintendent of police, an inspector and an assistant sub-inspector, and an officer of the local forensic laboratory.

The commission was set up to probe the deaths of Nilofar Jan, 22, and her sister-in-law, Asiya Jan, 17, whose bodies were found by the police beside a stream near Shopian town on May 30.