Glitches In Infosys's New Income Tax Portal May Delay Its India Business Head's Exit

Indian multinational information technology company Infosys is attempting to persuade Raghupathi N Cavale, the company's India Business Head, to delay his retirement next month and stay on. As per a report, this decision was taken while understanding the fact that his departure could jeopardise the company's efforts to turn around the critical Income Tax portal project, for which it received harsh criticism this week.

While Cavale was supposed to retire in September 2021, people aware of the situation told Moneycontrol that Infosys, which became the latest Indian company to hit a $100 billion market cap, is now counting on him to save the Income Tax project.

The executive was supposed to be replaced by Vice-President Karthikeyan Neelakandan, who was assigned in April 2021, allowing for a transition in September. However, according to the latest report, those intentions may be altered now as the company is facing backlash over a series of errors in the newly launched I-T portal.

A source said: "It is true that Cavale was supposed to retire in September but the company is now trying to retain him and grant an extension."

Meanwhile, according to another person familiar with the internal matter, Cavale—with close to 26 years of experience spanning various industries—had taken a backseat in directing India operations a few months ago but was called into action in the last few weeks due to his extensive experience managing government projects and dealing with officials.

However, Infosys CEO Salil Parekh and Cavale travelled into New Delhi earlier this week to see Finance Minister Nirmala Sitharaman, who expressed her grave displeasure with the project's handling. Infosys now has time till 15 September to solve the problems.

However, the Infosys executives met with Sitharaman on 22 June and assured her that the problems would be resolved. Prior to the latest meeting, which took place on 23 August, it was reported that the Finance Ministry and the IT giant had been in constant contact.

According to a Finance Ministry official: "There has been constant communication with Infosys on the matter. We are regularly apprised about the work being done on it, as well as the problems being faced by taxpayers."

Additionally, the official said: "The Finance Minister now wants to better understand from Infosys why work is taking so long on glitches which were brought to their attention some time back, and what is being done to expedite it."

Infosys was awarded the contract in 2019 with a budget of Rs 4,242 crore. According to a person familiar with the situation, the overall cash granted to the IT company was close to Rs 160 crore, with the remainder being distributed over an eight-year period. The goal was to create the next-generation income-tax filing system, which would reduce return processing time from 63 days to one day and speed up refunds.

Since its inauguration on 7 June, the new income tax e-filing platform designed by Infosys has been showing glitches. The entire tax filing procedure, beginning with logging into the portal, is riddled with issues that frustrate users. Many of the users were not consistently receiving One Time Passwords (OTP), and e-verification was proving difficult.