Indian IT Billionaire Opposes Unions, Plans Payout(Forbes.com)

There are no unions in India's information technology sector now and the billionaire chairman of the country's top software exporter wants to keep it that way.

"The unionization of the sector would certainly be a retrograde step. It will unnecessary damage the growth of the industry as global clients will get concerned about whether they should be sending business to India," said Wipro's (nyse: WIT - news - people ) Azim Premji, according to the Hindustan Times newspaper.

The IT sector is a key component in India's $17 billion in annual earnings from outsourcing. Companies such as Cisco (nasdaq: CSCO - news - people ), Microsoft (nasdaq: MSFT - news - people ) and Dell (nasdaq: DELL - news - people ) have all availed themselves of India's programming talent. But left-leaning trade unions have charged that Indian outsourcing companies violate the country's labor laws.

Premji also proffered a carrot to go with his union stick: A "generous" dividend increase. "We have $1 billion in cash reserves," Premji said, according to another Indian newspaper. "We plan to give more generous dividends to the shareholders than over the past two years but under the broad outline of the company's dividend policy." The paper speculated that Wipro may pay shareholders between 10% and 15% of its free cash flow, up from 3% to 4% before. Another chunk of Wipro's cash would be used on acquisitions.

Now a large part of all this largesse will come back to benefit Premji himself--he owns 81% of the companies shares. But it sounds like he will be around to enjoy it all. Though Wipro has had two high-profile defections this year, Premji has no plans to go anywhere.

"Under our strict system of succession plan, we always have potential candidates for succession," he said. "But I am going to continue my job for the next five years. It is predefined. None of my family members is working with the company. Succession is purely on merit."

The chairman of Wipro Ltd., a top Indian software exporter, says he is opposed to unionization of the information technology sector, according to a news report published Monday.

"The unionization of the sector would certainly be a retrograde step. It will unnecessary damage the growth of the industry as global clients will get concerned about whether they should be sending business to India," the Hindustan Times newspaper quoted Aziz Premji, chairman of the Wipro, as saying.

Currently, there are no labor unions in India's information technology sector, a key part of the country's huge outsourcing industry that does software programming, customer service and backoffice work for multinational corporations.

India claims 44 percent of the world's outsourcing market, with US$17 billion (euro14 billion) in sales annually from the business, according to the National Association of Software and Service Companies, the country's main software trade body.

Trade unions, especially those supported by communist parties, accuse Indian outsourcing companies of violating labor laws.

If workers want to unite and bargain collectively with management, they have a right to do so under the constitution, Prakash Karat, chairman of the Communist Party of India (Marxist), said last month.

Premji, 59, is ranked 38 in the Forbes list of billionaires with a personal wealth valued at US$9.3 billion (euro 7.75 billion). Wipro also has interest in lighting, consumer products and edible oil.

Wipro's revenues totaled US$1.87 billion in the last financial year that ended in March, of which US$1.39 billion came from Western outsourcing.

The industry, he said, was facing a big challenge not only from the United States and other developed countries, but also from low-cost countries like China, the Philippines and Malaysia.

I have no problem with workers choosing to negotiate collectively.

However, the government should not prop up or protect unions.

If the workers resort to violence or other tactics that bad unions sometimes employ, they should be arrested and treated harshly.

If the employer decides to fire all the union employees, the government should not intervene.

If the unions are left on their own, the union shops will end up with the mediocre and lazy workers, and places that pay workers based on merit will get the better employees.

I dealt with a lot of Indian students in graduate school. They're just like anyone else. There are some very intelligent, talented, and motivated people from that country. There are also a lot of lazy people going to school on mommy and daddy's bill.

Fortunately, many of the motivated ones I met decided that there were better opportunities in the US than back in India. If we're lucky they'll go from student visas to work visas, and eventually work toward citizenship.

Hopefully, the lazy ones will return to India after spending mommy and daddy's money here in the US.

Yea, I can understand that, the cost of living is much lower there. They already understand the society and they can live will off of what they made here in the states.

I'd rather they stayed here in the US, but our tax system tends to drive good people away once they've done well for themselves. That's what happens when you punish success.

However, they did provide valuable services while they were here and helped our economy in the process.

"I'd rather they stayed here in the US, but our tax system tends to drive good people away once they've done well for themselves."

I've noticed that. Once a person succeeds they are expected to create a charity and then give it to starving Africans. Whether they really want to or not.

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