TCS Corporate Sustainability Report 2010-11 - Tata Consultancy ...

level of the larger economy and thus, we can claim a role in a transformational phase of the
global economy, marked by significant productivity gains from the deployment of IT.
The productivity benefits from our IT-related work directly translate into community benefits
when we engage with various governments to digitize their operations, that too in the area of
citizenry services. The level of transparency, access and empowerment that these initiatives can
create in communities can never be overstated. We do not believe that any part of our
operations has a potential or actual negative impact on the communities we work in.
Secondly, our profitable global operations result in payment of the applicable corporate taxes
in multiple countries, helping fund the governments there and thereby improving the quality
of civic services in those jurisdictions. Tax expense relating to overseas operations is
determined in accordance with tax laws applicable in countries where such operations are
domiciled and provided for. In FY 2011, TCS provided for a total tax expense of $465.3 Mn,
distributed across 50 countries.
Direct and Indirect Employment
TCS’ strategy of a distributed delivery capability, tapping into the local talent in each of our
delivery locations has resulted in a largely balanced, positive economic impact in each of those
locations through employment generation – direct and indirect. Direct employment results in
the creation of a few tens of thousands of high-paying, white-collar jobs, broadening the tax
collections at the local, state and central levels.
And then there is indirect employment. Each of our delivery centers, housing a few thousand
employees are massive and their construction employs architects, engineers and hundreds of
construction workers. Once the facility is commissioned, the center opens up tremendous local
employment opportunities for workers with all kinds of skills as our vendor-partners begin to
hire housekeeping staff, security guards, drivers, gardeners, maintenance workers, chefs,
cafeteria staff etc.
The creation of all these jobs, direct and indirect, at one location, creates a massive demand
for local housing there, sparking a secondary real-estate boom in residential properties
with multiple projects coming up, employing hundreds of skilled and unskilled construction
workers.
Moreover, the beneficiaries of these net new jobs are often young (median age of the
workforce: 28 years) and therefore tend to display high consumption patterns, benefiting local
businesses and by extension, the local economies. The spending behavior and consumption
patterns of our employees open up tremendous business and entrepreneurial opportunities.
Banks set up branches or ATMs to service this highly attractive demographic. Small businesses
come up in the vicinity to supply all varieties of services and products – restaurants, grocers,
departmental stores, gyms, pharmacies etc. These in turn generate even more local
employment and opening up new tax revenues for the government.
15
All in all, it is conservatively estimated that we generate 4 indirect jobs for every 1 direct job .
Taking these indirect jobs into account, TCS’ consolidated, global employment footprint is
estimated at over 800,000.
Infrastructure Development
The coming up of new communities around our delivery centers is also accompanied by
development of the local infrastructure. Local municipalities and utilities respond to the needs
of the growing community by improving existing roads and building new ones to improve
connectivity, extending the grid to supply electricity and laying pipelines for water and
sewerage. Public and private transport providers begin catering to the commuting needs of
local residents. Telecom companies set up towers nearby for mobile connectivity and cables for
15 Source: NASSCOM Strategic Review 2010
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