Mohandas Pai on India's Tax System, Healthcare, Jobs & The Future of India | FO539 Raj Shamani

24:22And UP has come down to 2.4 and BR is 2.6. I mean, 2.9, right? So, in future, we're not going to have so many children. So, every child is valuable. I mean, every child at birth is valuable. It's important. Because, see, please remember, Raj. We are lucky because in the OERN lottery, which what Mani Sabarwal says he was interviewing once we were born to parents who gave us a good education you walk in the street, you see a child on the street it could have been you you were just lucky and then you got a good education, you succeeded so you have an obligation that that child on the street also gets a good education so everybody should get it and the government of India is spending money they spend 7 lakh crores on school education why are they not able to fix it then?

25:12They're not able to fix it because of mismanagement. See, tell me, what is the difference between a good school and a bad school? Teachers. No, it's the principal. It's management. If the headmaster is good, everybody works, everything works. If the principal of a college is good, everything works. If the vice chancellor is good, everything works, right? Leadership. Yeah. Between a good country and a soft country, the leadership. True. So when you have so many children in school, maybe 1.2 crore teachers, 16 lakh, 17 lakh schools. It's very difficult to manage that. And government mismanages, they don't care.

25:50There's casteism. They take them away for other work. There are no secretaries come and go. They change what they want. There is no consistency. If you have a, for each state, you have a, you know, the board, SLC board and others work well, then it will work. For example, CBSC works very well. Why can't the state boards work well? And the state boards can work well if they manage it very well because they spend a lot of money. The spending on education by the state is about 25 ,000, 30 ,000 rupees per year, which is fairly good. But we don't get the output because there's no accountability. In a government school, if the pass percentage is zero at class 10, nothing happens to the headmaster.

26:30There is no penalty. Nothing happens to a secretary. Nothing happens to a minister. Nobody cares. See, a society is made of people. It's not made of buildings. He's not made of business. He's made of people. The society exists for people. And every child, when a child is born, should have good prospects. And later, how the child does is up to the child. But what society should do is make sure the child grows up in a reasonable way, doesn't suffer for want of food, can get good school education, and the child is reasonably bright, gets a college education. That's what we should do in society for every child in the country.

27:07That's our obligation. And that's why we started Akshaya Patra. We did it. And you know, two, three generations. He's been there for 26 years. He's worked very well. The largest midday meal program in the world with Iskara in Bangalore. And it has worked well. But I would like every Indian of any means to adopt children and pay for the education. See, there are nine crore people who pay taxes, filed returns. Three crore pay any tax. If each of the three crore adopt a family, pay them four, five thousand rupees a month. That's three crores more family who get money. And that's enough for a school education, right?

27:42So there has to be compassion in society. And we must do a bit. We cannot say, I pay tax. It's a government job. Yes, it's a government job. That's all true. They have to do it. They do a reasonably good job. A lot of mismanagement is not working. So we must do a bit. Two things on this. One, a lot of people are compassionate, but they don't know where to put money. It's very simple. you have a servant at home sponsor the child's education. I'm sure many people do. You've got a driver sponsor the child's education. Many people do that. Yeah, many people. There should be larger number. Larger number, do it.

28:14Do it. That's what I'm saying. An immediate family member you have who is poor sponsor the education. Do it. See, in every family, I mean my age, in a family, not everybody has done well. Some have been lucky. Some have done better. Some have not done well. but if you're not done well, help the people who are not done well. See, Raj, education is the greatest gift society can give as youth. There's no other gift greater than education. Education is what makes a human being. True. You understand? Yeah. And you must give education free of cost to everybody who can't afford it. Who can afford it can go to private school.

28:54Whether you go to public school or private school is a choice parents make. But the public school should have good quality. So there's no discrimination. Fair. Today, many children who are poor go to government schools. If they don't get a good education, how will they compete when they grow up? The private school children will compete. How will these kids compete? My mother studied in a government school long ago. She passed away three years ago in 92. She got the first rank in her district and she got a government job as a teacher. Because those days, you know, you're first, they used to give a job.

29:27And there's no food in the house for many, many months. And, you know, she told me the stories when there are no food to eat for two, three days at a time and all that. They were poor. But she did well. And then she married and she brought me up and she walked to school 30 years to save the bus fare for me. I didn't need it. My father had a car when I was going to school. But those are the people who built it because for them, educating the children was the most important thing in their life because they understood. And it transformed our lives. We did very well. Extremely well. And when you go to school, getting 99 in mathematics was not okay.

30:03You have to get 100. See, it's the mother in the house who brings up the family and the children, right? She used to get up early in the morning and, you know, cook for us, send us to school, go to school, come back and cook for us and make a homework and then go to bed. Even my wife, very well educated. She's got a commons degree and the law degree. We got two boys and she gave up a job just to look after the boys. because she told me that, you know, when the child comes home from school at two or three, and then says, Mama, Mama, I won't talk to you. The Mama is not there. She's gone for a job.

30:39They get disappointed. So she gave up her career. And she looked up to the boys, and the boys, my boys are doing very well. And I'll tell you, Raj, for every person, however accomplished you are, however big you are, you could be the richest man in the world. The greatest leader the world is seen. in the later stage of life where children are not doing well, all that is of no use for you. But what you've got left is your children. Your children should do well. They should be good human beings. They should be settled down. They should be happy. If they turn out to be bums with no future, wandering down and depressed and all that, what are the use of all that you've done in your life?

31:18Look at Gandhi. He destroyed his family, right? He destroyed his family. Devdas got drunk, then he converted, became a Muslim and converted back. And Gandhi wouldn't help him to go to London to become a solicitor. Whereas his father asked him to, made him a solicitor, paid for it. He didn't do it for his children. Many of his direct children, right? Very wrong. He could have done it. There's nothing wrong in helping a child. No nepotism. It's good he didn't allow his children to come into politics, unlike Nehru, who promoted his daughter. And we are stuck with the dynasty now. Because he made sure that the daughter came, became the Congress president.

31:55And then, you know, she made sure that she became prime minister and all that. And the family continues. And that is a, you know, not a good thing to happen in this country. But Gandhi, but you shouldn't destroy your children. You have an obligation. See, Raj, all of us have obligations. Yeah. You are born to your parents. You grow up with them. They take care of you. You must take care of them when they grow old. You have siblings. Yeah. You must be happy. You have a spouse, maybe. You have children. You must take care of them. And that is life. Life is a journey. Right? Life is a journey. You understand this when you grow older.

32:31True. I too never understood that. Focus on the career, everything else. Nothing else matters. But, you know, achieving career and all that. But, you know, these are important things. That's why as a society, we must make sure our children get a good education, good health. Everything is available for them. First principle. True. Because they are the future. What are we building all this India for? For young people. for people like you. True. People like you. If the IT industry was not there in the last 30 years, this would have existed. Where would the young people have a future in this country, right?

33:05If liberalization had not happened in 91, we are not grown. Where would all this be? So I think, you know, society is made of people. Focus should be on people. And we in society should play our role. For example, now, after I left Akshira Patra in 2020, after that I said, what should I do for the rest of my life? Now I work with somebody to run a DBT program. What program? Direct Benefit Transfer Program. You see, what is poverty? Poverty is lack of purchasing power. You got purchasing power because you got education. You are purchasing power because you got ancestral wealth or income. You got purchasing power because you got a job.

33:43Now, I'm born poor. I got no skills, no education, no job. I do daily wages. I don't have purchasing power. Correct? So, what you do is, you give them purchasing power by giving money directly to the bank, like these people are doing today, all the governments are doing today for women, which is, I think, a good thing. And I'll explain why. And once you get money in the bank, and your food is taken care of, now they give you free food, which is very good and all that, then you get security. You're not fighting for your next meal. Hunger is a terrible thing. you be hungry for two days without food without hope then you understand the pain of hunger so hunger is a terrible thing so you get security when you get security you look after other things education health and all the things and so many people are broken they got no security they don't know when the next meal is coming from they got nothing to look forward to you give them some money and then you help them through an NGO to develop skills connect to jobs and all that then you help them so today I sponsored about 200 250 families doing it for the last four years And my friend from Bangalore, Chris, also is doing something.

34:52So we hope it becomes a movement. Like I said, if three crore taxpayers adopt one or two families, give them 5 ,000 rupees a month, that means there'll be two crore people. Two into four, eight crore people. Eight crore people who are poor can come out of poverty in 10 years. Right? So if you understand this country belongs to you, society belongs to you, people belong to you, you have an obligation. Dharma. That is your dharma. True. then you do it. You do it not because you want anybody to respect you or to give you awards. No. You do it because it is a duty. True. Okay. Going back to one of the incidents in your life where I'm switching back to your childhood because it's important for people to know.

35:34When you were quite young, somebody called you knocker. Right? Somebody called you servant because you were working there. What was the entire story? I was working in a family firm because a friend of mine asked me after when I finished my CA or sometime wanted to come and run this leasing company. So I worked there as executive director. He was MD. We built the company together. So it was my first corporate assignment. It was not a job. I was the top guy. I had one person report to. That's fine. Then they had a family fight. Because some senior people died and will and all the family fight. So I used to go in for the family.

36:09I'd sit down with them and tell them try to do something. And one day one the family member said I'm going to talk to you so I'm going to talk to you. I said, Naukar, Naukar, Naukar. What is Naukar? It didn't hit me at all. Like I was abusing me saying, why the hell are you bothered, man? We are Malik's, you are Naukar. You have to listen to us. I felt humiliated. I'm a rank holder in this country, in CA. Being a rank holder is not easy. Yeah. I've got self-respect. I'm working. And I said, oh my God, Naukar. Nothing wrong with being a Naukar. But I was not a Naukar. I didn't feel like a Naukar.

36:42The way he said it, you should never humiliate anybody. You realized that at that point? Yes. When he said it? Yes. What was going on in your head at that point? Nothing. I said, look, I'm running the business along with them. I'm creating things for them. And they're calling me and abusing me like this. When it comes to the crunch, I'm just a nauker. I'm a professional. Is there no respect for people? How long did it take you to then step out? Look, look, look, Raj. I mean, very soon I left that company and all because the family fight and all that. But Raj, happiness is the delta between expectation and reality.

37:17Explain more with that specific. Happiness is the expectation between happiness is the delta between expectation I expected to be treated well I expected to be respected and these people thought I'm just a high knocker and high stuff, why the hell are you bothered is me, I never thought of it, they treated me like that maybe I had high expectation being there, I shouldn't be there then I vowed because when I was a rebel in my college, I vowed I'll never work for anybody, I'll not be an employee When did you do that? How long before you did that? No, no, ever since college and all. We are rebels, you know.

37:51We are rebels, you know. We grew up to be rebels. We had that spirit. We had a, I think immediately after emergency, we marched on the street, protested. We fought for re-evaluation against the university. And even in college, we did all the kind of stuff because we are rebels. I mean, it's good to be rebels when you're young. So, I didn't want, then he said, you run the company. I said, so it's worth it. So Murthy and Nandan called me and said, why don't you join? I said, I want to be a consultant. I don't want to be an employee. They treated me very well. They respected me. It was a fantastic experience.

38:25Then, you know, six months I was there. I worked in Murthy to produce an annual report, which is the best annual report India has seen in disclosure. And it was sold in the black market in Mumbai and all that. It was very nice. Then one day in October of 94, he came to my room and said, Mohan, you're joining a CFO from tomorrow. A minute you have to come. You can't be a consultant. I said, okay. He was a great guy. You know, I worked in a company which treated you with respect. I was at the top of the pile. And we used to argue with Murthy and Nandan, we used to argue with Murthy. And Murthy was very strong.

38:56You push back and we push back. We had no fear there. You are the CEO and chairman, founder, chief founder. And he listened and best idea won. And I won many times. Best idea won. People complained against me internally, you're listening to him, you're not listening to us. We won and that's great because we could do great things We could set standards, achieve great things, and do everything well. And we wanted to be the best in industry because Mutti told us, you may not be the biggest, you can be the best. Best depends on you. Biggest depends on many other things. She wanted to be the best. We set standards in everything.

39:28Every facet of work, hiring people, treating people, stock option, campus, technology, training, education, brand building, investor relations, everything we set standard. Many of the things in the market that you see in investor relations, we set standards voluntarily much before it became the law. I was a board member of SEBI for three years. I headed committees there. I sat on committees there. 20 years I worked with them. Set standards. And India did well. And, you know, we've had the best corporate governance standard. I was the only person meeting 300 investors a year in the 90s. Kekimisri came and he was also there.

40:00And we both worked together to build this country. Build respect for this. We had no respect. They treated you like shit. They looked at financial statements. It's a piece of crap. You know, we don't trust you. The India risk premium, which is very high. So we've gone through all that, Raj. And when you go to overseas, they look at you and say, ah, India, ah, and all the things. I've been racially abused in Frankfurt, in New Zealand. Been through all that. It hurts you when you've got pride and self-respect. See, you should not go through that, Raj. I don't want my son to go through that. I want you young people to go through that.

40:34I'm sure my parents would not want me to go through what they went through with the British. No, it's not a good thing, right? True. so that family thing is like that so shock even before you joined any of this when you were young you were a teenager you used to read 4000 balance sheets why? 200 ,000 3000 balance sheets because just interested see my father as a kid who reads that see my father used to get the Hindu newspaper every day from his office in the yuning morning we had Indian Express yuning Hindu I used to read entire page to page in the Hindu just curious okay then there's something called Leo's News and Notes on the economic page and used to talk about company accounts and company performance.

41:18I used to just read like a storybook. Then he was the shareholders to get annual reports. I used to read it cover and cover. Then I went to the stockbrokers, collected annual reports. I wrote to FT because FT had a service whereby they sent all the global reports. I collected 2 ,500 reports, read all of them, improved my knowledge. I used to go to shareholders meeting with my wife and question them and all that. some of them like SSV, Bangalore leasing, run away from Bangalore and all that. So a lot of things happened and we learned. So we are rebels. I got hired because I went to the Infosys meeting and asked questions.

41:48So I had an interest. Just some interest. Some people have some interest for music. But what were you looking for specifically? Information and growth and how figures work and just like that. But back that, at that time, were you like, was this a norm to be super ambitious and look information that something will change around, like change your life? No, the idea will change my life was never there. It's just that it was there and I should read it and I should understand it and take joy. Which is exciting. Yeah. Nothing else. What else was there in life? Nothing. There was no expectation though their life was very simple and very quiet.

42:22Nothing happened, Raj. The joy was going for a morning show paying three rupees. The joy was, you know, cycling five kilometers and playing cricket. The joy was going on a Sunday and playing a cricket game. That was joy for us. Nothing else was there. There was no TV those days. It came later. There's radio which listened to commentary. It's a very different life, Raj. You won't understand that life. It's very, very different. And then... The external stimuli was very less those days. Today is completely different. Today you're inundated with the external stimuli. You have to choose. Those days we have no choice.

42:59See, democracy is all about choice, ability to choose, and availability of choice. there will be a lot of choices today enormous amount and we have ability to choose also because economically better off so those were different days Raj you said while you were telling me about Infosys you said there was an India risk premium you had to pay what do you mean by that? see today if you look at all 4 trillion dollar economies United States 32, 34 China 20 Germany 4.7 Japan 4.2 India is 4 now it's come down a lot because rupees come down. And UK is 3.8 % and France must have gone up because of currency.

43:42All of them have got a cost of capital of 6 % to 8%. India's cost of capital, 11 % to 13%. What is the cost of capital? Cost of capital is a function of the sovereign death rate. 10-year bond. 10-year bond in America is 4.5%. India is 6.7 % or 6.9%. Japan is maybe 2 % or 3%. And UK is 4.4%. Okay? So our is high because they say we got higher inflation, which we don't have now. And the India risk premium for equity. Equity risk premium is 4, 4.5%. US is 1%. UK may be 1.5%, but 4.5%. Why 4.5 %? Because one, when you come to India and invest in a foreigner, you want a higher return to make up for the greater risks that you see in India.

44:26What are the risks of India? Policy uncertainty. Government will change policy retrospective effect. We had this indexation for capital gains. They just changed it. Despite telling people that we're not going to do the retrospective impact, the impact was retrospective. They could have said till 31st of March, we'll accept indexation, that will be the carrying cost for the next year. Instead of, I have been assured they changed it. They never thought about it till there's a pushback. And for property, they gave an option. It's so silly, the finance minister said, I will not change. She promised in parliament she'll not change.

44:55She went back. She didn't understand she went back. That's the problem. She didn't understand. If she understood, I'm sure she wouldn't have gone back because she made the commitment. So policy uncertainty. Vodafone. In Vodafone, the tax officer taxed the capital gains in India despite the transfer being taken outside, went to Supreme Court. Supreme Court said, we understand why you attack, but the law doesn't provide for that. So what did Pranamukha do? In Parliament, he changed the law for 1961. 1961, saying there was always the intention. The intention is denoted by the debate in Parliament when the law was introduced.

45:30There are nothing, nobody knew about this. and then you destroy the confidence of people in the tax system. So the whole world's confidence in India was destroyed because it went retrospective. So nobody knows what I was on TV at the time and they asked me, what do you think of this budget? I said, give four out of ten. He said, why? I said, it went retrospective. What is to prevent the government or the politician to amend the law to say, unless you are registered under the law, your marriage is not valid. When you all got married, there's no registration. You're not registered. The 40 years back, your marriage is not.

46:01They can do anything they want, no? It's arrogance of power. How do you trust people? They destroy trust. Trust of investors should not be destroyed in the country. And we need policies. And the policy stability, that's not there. The second thing is tax terrorism. Tax terrorism keeps on going. They pick up MNCs, write all kind of rubbish, everything. For Infosys, for GSTs, 35 ,000 crore, we're going to levied. Give me a break. Because they're all exporters. In one case, I went for income assessment. He said, you're exporters. He said, you're not exporters. I'm going to make it charge you like as if it's domestic income.

46:33I said, man, we're exporters. We get dollars. Here's the data. No, I don't believe that. What do you do with such people? They threaten you. There's no rego. Then go to court. Go to commissioner appeal two years. Go to tribunal three years. Go to high court for five, six years. Then go to Supreme Court ten years. And even if Supreme Court takes a decision where I have suffered, they don't follow it up. They don't give, you know, They never gave, you know, they never implemented the order till I had to call up the CBTD member and tell him. And my colleague went to high court and took a contempt petition against them.

47:09Then they did it. That's the kind of people they have. And who cares? We've been through all that, Raj. Okay. So taxism. Third thing is courts. Any commercial dispute, 10, 15, nobody cares. recently the Supreme Court also in that case for Tiger Global said that your residence in Mauritius is dependent upon the facts of the case and not the procedure because there you get a residence certificate it's deemed to be so. They did it. It's not to be done. Then the government has come out a clarification that before this date when we had gap you know some new process we are not going to reopen anything.

47:50until they did that. But it happens. And Supreme Court in that telecom case said all the license given by government is invalid. Now what happens? The money they gave. They shall pass an order. All the license invalid. Whatever money you give government, government has to refund. For example, in the custom case in America, Supreme Court said you don't have the right. No refund is happening. Nothing about refunds. No consequence. Tariff case. Tariff case. Tariff is customs. So what do you do? So nobody believes you. nobody trusts you. They want a bigger money. So how can you go to$10 trillion the cost of capital, $11 to$13?

48:26What will happen? The people who got money get bigger returns because if you don't give them return, they will not invest. So consumers pay more money because you're forced to earn greater returns. You understand? So you can't grow. So there's inequality more because providers of capital become richer. The providers of labor don't get their share. And providers of labor, consumption has to go up. Investment is by providers of capital. So there's got to be a balance. Mean return on equity for the Nifty 550 is about 14-15%. Just two days, last week, we had a bank. 2.5 % return on assets, profits.

49:04You don't earn the kind of money in the company system. Another bank, 1.95. Very high. Another biggest bank in India, 20 % return on equity, post-tax. Give me a break, man. That's outrageous. That means you're charging more. Because there's no competition. One-sided. See, income of people doesn't grow up at the same pace. When you charge more, with the money you have, you can only buy that much. So growth doesn't happen because consumption is not there. If you charge less with the same money people have, you can buy more, people produce more, cost comes down like China did. Chinese bring down the cost of manufacturing every year because of competition and subsidies.

49:44So more and more people can afford to buy and they become the largest producer in the world. In our case, we want greater returns. Auto companies have got 20-22 % operating margin. The biggest car companies got 14-15 % operating margin before, you know, your royalty. Ford in the best year had 8-9 % operating margin. Best year. Obviously, they don't make that much money. We make so much money. Total pre-tax profit in the corporate sector for the year 31st of March 2025 is 15.4%. I publish articles. Highest in the world. In America, 11%. Isn't it good? It's not good because you're exploiting a system because of lack of competition.

50:22See, there has to be a balance between profitability and consumer benefit. So you said that cost of capital is still the highest in India. Highest in the world. Highest in the world. In India, it's highest in the world. Yeah, for the competitive size. And you said we're paying the price since the time of Nehru till today. What did you mean by that? No, no. See, we are paying the price from Nehru is because we don't have enough competition in this country. we should open up because we have allowed regulators and others to mollycodile the industry and not have competition. See today, the steel industry was being hit by dumping from China.

50:59They put tariffs against them. So they're making money, they head over heels now. Why can't they become efficient? Sajjan Jindal made a statement, I remember, where he said China, they have an operating margin for steel of three to 4%, which is unviable. Here we want 13 to 14%. which they believe it is the right. It should be competitive, no? Look at Tata Steel earning per ton of steel. Outrageous, man. But do you think after knowing all of these things and what's going on in India today, a young person still have an opportunity to break these cartels and amend and have like a fair shot at making wealth and creating wealth?

51:39They come out of the innovative product which is much more competitive, much more better and much more... Regulators, tax terrorism, cost of capital is high cartel I mean you talk to startup founders they were the angel tax by which they think we all protested went to government they changed it three times and they messed it up again they changed it prime minister was concerned I mean this is a harassment I want the finance minister to protect us because they are our representative but do you think a young person has an opportunity to create wealth because the economy is growing well the growth growth if all this is not they will grow faster and make more money you understand what it is We're still growing even after all of these challenges.

52:17Yeah, that is the beauty of India. We are still growing despite that. We are working. Look, the pain of growing and the pain of business is higher in India than the US. Or in the Western democracies. So, does it make sense for a young person to build in India or go outside and go in the US and pay? Build in India. Growth in India is high. Because next 10 years, we grow 7-8 % per year. That's fantastic. But then with all of these problems that you just told me. You have to manage it. You have to work it. That's what we have done. We build Infosys. with all these problems. One of the stories I was very fascinated that early time before the license Raj like everything India got LPG right you guys even before buying one computer we had to get an approval from government pay 175 % duty wait for one and one and a half years to the government apply to them and by the time they gave the license the technology had changed.

53:09You say I want this machine go apply they go on asking questions they don't give it to you. See from here you have to go to Delhi sit in front of...

53:20Even today, I'm telling you with RBI, I'm telling you, startups when they go apply to RBI, they don't reply. Even today, I complain to three or four governors. They don't reply. Why they don't reply? They don't reply. They don't have an obligation to reply. So when asked for an appointment, they don't meet. So what do you do? Go hire the big four. The big four are managing the system. They walk up and down, get to the approval, and charge you a fee. I took Raghuram Rajan to Bangalore. He came to Bangalore. We showcased some startups and all that. Then he called us to the Reserve Bank. We went to Reserve Bank and I complained to him that when we talk to Reserve Bank, they don't apply, they don't reply, they do this.

53:54Then he asked one of the lady officers, Madam, why do you do this? What is the product? You know what she said? Sir, these people hire the consultants and they come here and we give them answers. We do everything for them. Then they go charge a big fee. Why should we allow consultants to make money? That's the attitude. in front of him. What did he say? What did he say? I told him, you must stop all this. That's why I want in RBI and regulators, you must promise if you apply today, within so and so days, we'll give you reply. They got it in the consumer thing. They don't enforce it. Why they don't enforce it?

54:33Because senior people should say, every month sit and have a review. How many people applied? When did the reply go? How many days sit? And that's how you run companies, no? They should run that. Because senior people say, our job this policy, not to execute anything. Because the Reserve Bank has got multiple functions. They have to manage the currency on behalf of the government. They have to manage monetary policy for which they got autonomy. They are the bankers to the government. They are the accountants to the government for water banking transactions. And they have to make sure they are the regulators for the banks.

55:03And then they have to monitor the Foreign Exchange Management Act for which they have to give approvals. So you have to apply for some approvals. But that is a service. Approval is a service. You would apply your mind and reply. That is not a regulator. That's not autonomy. That's service. Where there's customer service, you treat them like customers. I have dealt with the SEC in the United States. When you file and all that, within a few times, they call you, have a meeting, they discuss and everything, they close it. You have nothing. You file, nobody calls you, nobody cares. In some of the regulators, when you go reply, are you talking about it?

55:37I will tell you. People have gone and suffered, man. I will tell you. Although they talk. We have all been beaten up Raj. Despite that, we have done well. But tell me a few stories from the time before. Like from the initial time. See, it is attitude to the person, not the law. See, I have gone to government, worked with them to change the law. And many things they have done, they have changed. They have been very passive. See, at one point of time when we did our ADR, there were no capital gains tax on sale of shares. Okay. So in ADR, what happens? You sell in the market. There's no capital against tax.

56:15So in the ADR, you sell in the U.S. markets. So the banker technically buys the stock from you and places it outside. So he went to government and said, look, there's no capital against tax. But if you do an ADR, the banker will be seen as the buyer and then he plays the tax. So why should they be capital? Give us a waiver. Because they're the same. You know, they went and made a run around and all these things. And some tax officer also, you know, some of my friends, they wrote a note, oh it will lead to so much loss of revenue and all that. I went and met a government officer and asked him, very senior man, who is now my friend also, he's sitting down here putting his leg up there, I'm sitting there, putting his leg up here, shaking his leg, shoes.

56:54Man, we can't do it, I had this and all they say you're going to lose 200 million, 300 million, how can you do it? 200 cross 300, how can you do it? He's telling me. I said it's the same, he's not able to understand, not able to do it, doesn't care, who cares? They write some rubbish report. see what happens the tax officers go to the finance minister and say if you do this we will not be able to cover revenue, you can't do it and all the things and then they ask for more power, they get more powers the current finance minister allowed reopening of assessment up to 10 years after it has been reduced to 6 years and for 2 years and in 2 years 1 lakh, 2 lakh rotisers were done and money was made and then they brought it down back again didn't understand why, because they would have gone and said we can't do it.

57:37They're all crook. The whole of India is crook. They don't pay tax. They don't pay tax. And the last three years, 72 lakh taxes have been collected. 72 lakhs have been collected. Direct taxes. I went to the, with one of the, you know, parliamentary committee in Bangalore for the new law. And I told him, 72 lakhs have been collected. You're giving more powers to them to raid, come to your house and all that and harass people. Why don't you put in the process that if you want to raid somebody, you have to go to a court and take an order. Before you go and show the order, when you go to somebody's house.

58:05because intruding upon the privacy. And tomorrow if we ill-treat them, they can go to the court and say, I was ill-treated, the court will take care of them. No. They don't want to do that. Oh, we are quasi-judicial. We don't want to do that. Okay. And then I asked him, so much raids have happened. So much has happened. You're threatening people, saying so many. How much tax did you collect in the raids? How much was stuck up in disputes? How long did it take to resolve disputes? How many cases went against you in the court? No data. Nobody cares. We did a search sometime back with the portal.

58:3570 % of the cases against the department, they lose. Nothing happens to the tax officer. Nobody cares. Nobody looks at the data, I think. They lose 70%. That means they're doing wrong. But why are they doing this? Arbitrary power. Some of them want rent-seeking. Arbitrary power, no checks and balances. You also spoke about it in one of the podcasts where you said a CA of a political figure told you that keep them happy, something like that. What was that story? Tell me. No, no, no. Keep them happy, keep them in good humor and then appeal it later. No, no. See, a CA of a political figure, he got raided.

59:19A political figure got raided. They found something and all that. And then the CA went and said, they're all wrong. We'll go to court, get a stake. No, he said, no, no, don't do anything. They all raided. They will come. They will settle it and we pay them some money and close it because you go to raid and all that they will do more and they will take 10 years don't do it and they means what tax officials they got no pretext you see i'll tell you they said we found thousand crores two thousand crores they keep announcing right you can check up in the media what actually happened after they file like go to assessment and file a case how much are they collected no data they don't they went to my friend's house they wanted to leave in his bedroom.

59:59He said no. Five days they went and did nothing. I'm telling you, Raj, there are horror stories in this country. I don't want young people to be pushed by the horror story and all this kind of stuff. It's important to know. I know they should know. But you know, this happened over time. Things are much better today because we got technology for assessment. 99%, 97 % of people get it automated immediately and all that. They get refunds. A lot of improvements have happened. But the 1 % still is so huge. And the one person is hurting us. Because there's no redress. The justice system is broken, Raj, in this country.

1:00:35The greatest failure of Indian democracy is the lack of justice. Whenever a case is filed within two or three years, you must get justice. The case goes on and on for five, ten years. And then what happens? Why do you go to court? Because there is injustice. And when there's no justice, the poorest of the poor suffer the most. The rich man pays to a lawyer, goes to the court and stands up, my lord, and he gets relief. Because senior counsel can go to Supreme Court. Now the judge, CJ has stopped that. They stand up anytime they can because the senior counsel, they say, my lord, I want this. They get hearing.

1:01:14What about the rest of us who don't get hearing? We don't get it. Where is justice? Justice is broken in this country. Broken. And why is it broken? Because we don't have judicial capacity. We got 22 judges for a million population. We need 50 as per the law commission. And the US has 100. We need more. And government is the biggest litigant. My friend told me there are 42 lakh cases stuck up in court for the check bouncing. Why do you want criminal liability for check bouncing? Put penalty and finish summary thing. They make it long. And he gets captured. What do you do, Raj? We must set right the justice system to make a better country.

1:01:49We must build judicial capacity, build courts, invest 50 judges per million population, build more prosecution capacity for criminal law, make sure that more prosecutors come and finish it, decide faster, and give justice. Then half the problem of corruption and all disappear in this country. And political leaders should make it. Give more money for justice system in every state. In one state where I work with the chief, I said, why don't you put more money into justice? Those judges, I don't want to give anything to them. they'd pass cases against government. See, Raj, any government has got five functions.

1:02:27Government. One is defend the country against external forces. Second, protect life, liberty and property of people. Three, delivery of justice. Okay. And the fourth is manage the currency. And the fifth, manage foreign affairs. Five principal functions. In all the principles that the government of India in the last 70 years succeeded, protecting borders, yes, they're protecting borders. It's happening. Internal non-security is working, but a lot of improvement have to be there. Correct? Yeah. And then the third thing, delivery of justice, total failure. And then management of currency, yes, they manage it reasonably well.

1:03:06Okay? Manage it reasonably well. And the fifth thing. Foreign affairs. Foreign affairs, they're managing it well. But you know, justice. Justice is the foundation of society. We the people of India do given to offset this constitution and promise justice. Where's the justice? Okay, let's... So we have addressed the political part of the country right now. Let's talk about the corporate. Now that this is the reality of our country. If every... It's a great country. I agree. Let's be clear. The great country. There's growth. There is opportunities. there are enough things going on we have young population we have a lot of things going right we have a lot of things going wrong right now if young people are watching it for the opportunity let's shift the gears for them and like build the podcast for them and understand from your infosys journey and then we'll eventually build it to towards opportunities current landscape your startup investment journey and all of that okay first is i actually want to ask you like when in the beginning you before buying any even one computer you had to go to delhi and you know sit in front of babus instead of politicians and write an appeal that hey we want to buy a computer and get it in india and they would ask you that why would an indian startup need or why would all that is all that's gone like why would an indian company need a computer so you had to beg in front of them and explain.

1:04:40All that is gone. But how do you feel today when the country takes credit for something for which you had to beg for? It's okay. See, in 1950 when you got freedom, Pandit Nehru in his wisdom brought in socialism and licensed Kota Raj. Because they're all enamored of the socialism of Russia. They did it. You know, he's a famous socialist. He did it. Gandhi Gandhi said that the government is a government. We became a government. From 1950 to 1980, we grew at 3.5%, population at 2.5%, per capita income 1 % a year. We became poorer in 1980 compared to the rest of the world in 1950. Japan grew, Germany grew, Southeast Asia grew, the world grew at a time of 4.5%, Southeast Asia 6.5%.

1:05:32percent. We opened up in 1980, we grew at 5.5 percent from 80 to 90, population grew 2.25 percent, per capita in 3.25 percent, but external debt went up from 20 billion to 80 billion and we are broke. We opened up in 1991, I think in May, and when Manmohan Singh stood up in parliament and said, nothing can stop the march of an idea whose time has come. Victor Hugo, okay. And then opened up, And then what are the magic? Magic. GDP grew from$275 billion in 91 March to$4.1 trillion in 2026, 7.98 % a year in dollar term for 35 years. 5 ,32 ,000 crores to 345 lakh crores, about 11.8 % of SOCIGR for 35 years.

1:06:17Magic. We've grown. Look at that. All because the Indian entrepreneur, despite the pain, despite all kind of mess and everything else, we've still grown. Now, future. in the last three years, we grew around 10%. 11, 10, 9. Last three years. Till 2025, I got data. This year we'll grow to maybe 99.5%. If you continue growing at 10 to 11%, 7 % real growth, 4 % inflation for the next, till 2047, then we will reach about 28 trillion dollars at 95 rupees to a dollar. So we have grown in rupees, but not grown in dollars because rupee is weakening. I'll tell you why rupee is weakening. So we can grow.

1:06:58And can we do that? Yes, because growth depends on two things. Consumption and investment. We invest 31 % of GDP. Last year, we invested 1 crore, 13 lakh crores. More than$1.1 trillion. We are among the three countries, we invest more than a trillion dollars a year in CapEx. If you read this report, privacy is not, don't listen to the rubbish. Look at the national income status. This is all there. So we invest. We've got a savings rate of 29%, 2%, money comes from outside. Okay? So we can continue to invest. We may have to raise the investment rate 34%. That means savings has to go up. Or we must borrow from outside.

1:07:34So we can invest. The key thing for investment is that the country has the capacity to absorb investment. You want to build more roads. There are not enough contractors, labor to do that. We are learning. We are much better today than earlier. Consumption is growing at 7, 7.5 % a year. But consumption to go, wages should go. That's where the problem is. Wages are not growing up. Consumption should grow. It's growing at 7%. But consumption is growing more at the top end, not the bottom end, because bottom end, salaries and wages, incomes are not going up. At the top end, because of higher corporate profits, stock market returns, and greater dividend, their income is growing up.

1:08:06At the bottom, they are not paying wages. The wages have to grow. So can we continue to grow? Yes. Can we absorb the growth and the capacity? I don't know. But in technology, with the third largest digital power in the world, We exported$238 billion of software last year, $320 billion of technology. With AI coming, it's going to change, but it'll be positive. I believe it's positive. The only thing is, we don't have investment money that's required. China invested$845 billion 2014 to 25. America,$2.32 trillion. India,$170 billion. We need more money to invest. And that is sorting itself out because we have the second largest pool of software engineers in the world, 7.5 million.

1:08:44America has 10 million, or which 4 million are Indians? 1 million there. 3 million working for them here. So we'll go to 10 million and we'll become bigger than America in terms of total number in maybe three to four years. Okay. So we can grow. The possibilities are there. Everything is there. But to do that, we have to increase investments. We have to increase consumption. Okay. So possibilities are bright. The 80 % probability will reach whatever numbers we want to achieve in the next 10, 20 years. Now, what is the challenge for India? The challenge for India is we have to produce good job for 1.6 crore people which no country in the world has ever done in human history.

1:09:19How do you produce job which pay 50 ,000 rupees minimum for one crore people a year? So we have to grow our economy. We have to grow faster at 9%. So we have to invest more. We have to grow faster. We need better policies. We need the animal spirit in people. We need more money to come in. We are not investing enough. We don't have enough capital to invest, to grow at that fast pace. Because every year, incremental growth is huge. You understand? And what is the fundamental challenge of India? We've got 550 50 or 580 million people in the workforce. 43 % of a workforce is in agriculture, where the income is 97 ,000 rupees per capita income.

1:09:55And I think about 25 % or so, I'm just quoting from memory, is an industry which is about 2 ,50 ,000, 2 ,25 ,000. And the balance of 30%, I think, is in services, which get 3 ,80 ,000. So we have to move this 43 % into industry and services in the next 20 years. it has to come down by 1 % or 2 % a year till it comes to 10%. China has got only 10 % or 15 % of population in agriculture. America has got maybe 1%. So in agriculture, there's not enough money. But of the 43 % in agriculture, which is 60 crore people, you take the families and all that, women are 63%. In COVID, it was 43%. After COVID, it was 46%.

1:10:3680 million women came into the, 80 million people came into the workforce in agriculture, which is a shock. to many people, but most of them women because the animal husbandry has gone up. We produce 250 million tons of milk and the self-help groups have gone up and the men are left and are coming into construction industry. So more women are coming to work. But it's also good. But we have to shift this workforce. So we have to invest in industry. We have to invest in services for which you require growth. The key for all young people is will India grow at that pace? And now we are in the age of disruption with AI.

1:11:06I believe AI will make us more productive. Yesterday we did a big conclaim on AI in Bangalore. A lot of people are there. There's positivity. and we'll create more jobs because we will bring in AI to all the global corporations in the next maybe five, six years. So I think the prospects are bright. The challenges are immense. We have to get our act together and work. And then how do we handle the North-South divide? India's per capita income is$2 ,25 ,000 or$2 ,30 ,000 last year. And UP is$1 ,7 ,000. $79 ,000 is Bihar. UP is 24 crore people. BR is 13 crore people. That is about 37 crore people.

1:11:4637 crore people on 142 crores is how much? About 25%. 17 % is BR, 9, 26, 27%. 26 % of our population earn less than 50 % of per capita income. So growth has to come there. Look at the challenges India has. Karnataka's per capita income is close to 4 ,50 ,000. The whole of the South is about 3 ,60 ,000. India is 2 ,25 ,000. UP is 1 ,07 ,000. and I think Bengal is 1 ,35 ,000, 1 ,45 ,000, much less than India. It's a disaster. Now, these are the challenges that Prime Minister has to do. Young people must understand these challenges. There's so many moving parts, so many parts of the country doing well, so many parts of the country not doing well, so many parts prosperous, so many parts taking jobs.

1:12:30So we have to produce the jobs, we have to grow, we have to do many things. We need great leaders. We need Bombay to prosper. Bombay prospers, better infancy, better proteal, create the capital for us. So you understand that? So I will tell every young man, dream big, work to achieve big and you will succeed in whatever you do. Work very hard, you will succeed because India is growing. The momentum is in our favor. Technology is changing. AI is coming. And we are going to be the leaders in AI globally despite not having enough capital. So we do well. The best time to be alive, best time. I'm more optimistic today and I have greater prospects today than maybe when I started my career.

1:13:08See, one thing which is not growing even after you provide job that is the fresher salary yeah that is people who start their job their the money the salary their income is not increasing many people argue many articles argue that what they were earning in 2008 probably they're earning the same thing today less in real terms less exactly so why do you think that is happening because the surplus labor more and more people are going to colleges becoming engineers willing to work they're See, today, tier two, three or three colleges are becoming the majority of people who come and work. Tier one, don't go to IT service companies.

1:13:45Large number, tier two also, don't they get better salary, they go. So there's almost infinite supply of young people who want to become engineers and come, right? And they're all ill-trained. Industry says, I'm spending an equal amount of money, three lakhs, four lakhs in the first year for training. But can they not, let's say... They should, they should. I would challenge all the CEOs of all the IT service companies to at least raise it to 5 lakhs. At least raise it to 5 lakhs and say we'll pay minimum of 5 lakhs. Do it. You won't get a hit. Cut your own salary. You get 10 crores, 20 crores, 30 crores, cut your salary and say do that.

1:14:19The other Murthy would have done if it's around for the industry. You should do that because you have a social need. You have to lead by example and this has gone on for too long. That's why media must write about it. Media must showcase all this and name them and shame them. That's the only way to work because look, if people don't move... You name them. You name three or four people who should... Three or four companies who should do it. All the top five companies. TCS should do it. Infosys should do it. Vipro should do it. Now they say... You are an influential man in Infosys. Can't you like...

1:14:51No, no. I'm not influential anywhere except as a citizen I have a voice. That's all. Nobody cares. You were, right? You were influential. Very influential. I was but I left in 2011. I pushed for it till 2009-10. 10-11 I could not push anymore because the resistance... Why the resistance? because they came and told me, oh, we should all work together. We should not raise salaries. We are discussed internally how I should increase our costs. And I told them that, look, let us pay more because we can beat the hell out of competition because earning more money will force them to pay more and reduce the margin.

1:15:21So they will not undercut in the market because they're all competing on price. And what I told them, people must understand. So I think... But why did you leave, Bersi? I wanted my life back, Raj. Raj, Infi was my dream. Raj, I'm so lucky, Raj. God has been so kind to me. When I joined InfoSys, I saw the rise of a great country, India. Next 25 years. I saw the rise of a great industry, IT. I saw the rise of a great company. And I was the heart of it. I was part of it. I made it work. I had a great life for 17 years. But it took a heavy toll on me. I had no life. I didn't see my boys going up.

1:15:58I didn't spend enough time with my wife. I've been a bad son to my parents. I didn't spend time with them. I've been a bad brother and sister to my brother and sister. I've been a bad husband to my wife. I've been a bad father to my children. Because I spent so much time building the company, running down. 14 hours a day, 12 hours a day, travel and all that. Sole purpose. We're driven. We wanted to do it. But I've been a good Indian. I built my country. I built this industry. But then I said, I want my life back. I don't want to be CEO. I want my life back. It took me one year to get out. How was Murthy as a boss?

1:16:30Unbelievable. The best boss you can ever have. extremely tough man unforgiving demands performance demands performance brilliant you can argue with him for hours brilliant demands performance you don't perform you don't exist ruthless execution strategy give me an example where he was ruthless to you he was not ruthless to me because I performed but what was the standard that he set and you felt like this was ruthless or you have seen it with someone else no no I was seeing ruthless because I tell you There are two or three occasions when we are not meeting on numbers.

1:17:09Then, you know, I promised him in 1994 as a young man. I was young then. That I'll give a P &L with 99.5 % accuracy at 3 o 'clock on the last working day of every month. And I did it. And you know what? But don't go to his room with the P &L at 3.15. He'll call me and say, why is my P &L not there? Are you sleeping? and the company became bigger and bigger and bigger. I had to do it. I did it. We made my systems work. The 99 % accuracy. If you meet your numbers, he'll have a cup of tea with you, smile and put it in his bag and disappear, travel somewhere. Don't meet your numbers and the numbers are less.

1:17:45He'll call everybody, make them sit down, work out the numbers, do hard work, do this and all. No forgiveness. Make them cry and make them do it. That's it. No forgiveness. And then we had the sexual harassment case which was hidden earlier. It didn't come out. Then finally he got to know because the lawyer called him up from US and said your name is there and all that. It happened when he found him. Within five minutes he decided that person has to go. Five minutes. No forgiveness. And this person was his blue-eyed boy. A high performer. No forgiveness. Out. Then he sent me there to clean up and all that.

1:18:20And I said we must pay him his salary. Then no. Out. Now that I want him back. I said we must settle him and all the things. He worked so hard. No emotion. whatever is the law do it closed it was tough was it tough to other people as well? everybody I mean he was fond of his own founders and all that I mean does some call but it's okay he's a great guy and you know he's a man who welcomed you you could have a conversation you could discuss you was brilliant and every time you know we felt bored we used to go to him and argue with him and fight with him and for one hour have a nice discussion go back and it felt fulfilled but he'll never give up so you talk to him about something he'll never give up And he was first to come and last to go.

1:19:01He used to come first to the campus, last man to go. And one day, in the second or third year, we were doing our annual report and we are behind on schedule. He said, man, nobody's going home till we finish it. So we sat the full night. And then he told me later, he went home at 4 o 'clock. I also went home at 4.30 to the house. And in the house, the first floor of the bedroom, he said, I couldn't go up. I slept on the sofa. I was so tired. Then he came out and said, I can't do it anymore. Physically, I can't do it. But he did it. He stood there. you should look at the annual report see it two or three times every line everything I had to read that same thing make sure nothing happens because you know till I stepped down I had to read all the quarterly reports everything two three times read the annual report line by line page by page because somebody will complain to him this para should not comma should not be and he'll call me what happened no forgiveness and then enough is enough so on finished I mean I done my bit closed his family office went to people from his investment office they went to China and they saw 996, right?

1:19:58And you've spoken about it. What happened in that trip? Look, Moorthy is very clear, not about China, that young people have to work hard. And he says, if one generation has to sacrifice, so the future generation do well. But what did they see there? Nothing. They work 996. Nine to nine, six hours a day. And they build great companies. Six days a week. Six days a week. And they build great companies. That's the rule. So what impacted so much that he got radicalized? No, he didn't get radicalized. He's always been like that. He's always been like that. He's been saying you must work some two hours, you must work hard, blah, blah, blah.

1:20:31And all that he's been saying all through. Nothing new except that media got attention and all that. What is he saying? He's telling you as a young person, when you start a career, for God's sake, work very hard, spend more time, learn, become competitive, develop your skills, become productive. Later in life, it'll impact you positively. That's what he's saying. He's not forcing you to do it. There's a law which gives time. You follow the law. It's up to you to do it. It influences many of us work very hard. 25 % of people when you do time sheets and all that didn't put in the regular hours. 25 % of people put in more hours, half of them in the cafeteria and all they were spending time.

1:21:07And others did regular hours, that's it. So the people who worked hard and put in great hours always succeeded, always did well. They were self-motivated, they didn't require an incentive, they didn't require a bonus. They worked hard and they did well. That's how we come up in life. Look at any sportsman. Why does he succeed? He works hard. Look at any scholar. He works hard. Look at any artist. He works hard. Look at you. Don't you work 12, 14 hours? I speak to media people when they come and say, why he said this? I say, look at all of you broadcast. How many hours do you work? All the anchors.

1:21:35Look at the time. Why do you spend the time? Does anybody pay you more? No. You do it because you want to suck. That's what he said. He didn't say it is mandatory. Media said, oh, Muti is making money. He didn't say mandatory. He said, it's good for you. Don't do it. Okay, don't do it. It's your call. And many of these lovely guys said, oh, why should I work my work? For us, work was life. Work was life. And we succeeded. If work is not life, we will not succeed in life. Life is very tough. Life is very competitive. There is no free meal for anybody. And there is no privilege. I agree. You know it best.

1:22:07You come up on your own. You know it best. Correct? I agree. And you also, when you have a small team or whatever it is, you know, they have to work. When work has to be delivered, it has to be delivered. Nobody cares. Correct? That's it. You work 16, 17, 18. and you work and you lead by example. That means the leader has to do that. Leader cannot say I'm going work-life balance all day, you slug, nobody will work. The leader has to work, leader has to demonstrate. What do you feel? Should there be work-life balance? See, it's individualistic. You have to decide what you want to do with your life.

1:22:41You have to work and put in work and be productive. That is no compromise. Weren't about that, you decide what you want to do, what you want to achieve and what you want for your life. Yeah. See the problem today is Raj, people don't understand they say work-life balance many people take the time they left from the house to the office as work I left home at 6.30 in the morning I come home at 8 o 'clock and I spent 12 hours outside the house 2 hours going, 2 hours coming because you stay far away that is not work man work is when you reach the office till the time you leave the office not from the time you leave home to come back home why do you say so far you understand most people want to put all their problems on the company and say company owes me everything company owes me transport, company owes me bonus the company owes me holiday come on give me a break company has to take good care of you but you have to lead your life the way you want it we also do something similar we end up saying this very often almost every quarter to everybody that hey there's a place for people who want to be very very chill there's a place for people in the company there is place for people who are who wants to maintain work-life balance and then there is place for people who are very ambitious are going to be there and the results for everybody the results for everybody will be different exactly the results will be different don't complain in two years and three years later that this person got more that's what he is saying that's what he is saying don't complain if things don't meet your expectation performance matters yeah that's all like we know that it's tough and it's hard the Japanese one generation clog their butts out to build Japan so children better.

1:24:19The Koreans did it. The Germans did it after the war. Every society has done that. Japanese, they still work hard. They still work hard. Too much nowadays. They shouldn't do it because unnecessary work. A lot of it is unnecessary. They're doing it. That's why suffering fertility. I read that 30-35 % of youngsters below the age of 35 haven't spoken to the opposite gender. How will they produce children? The population is shrinking. China's population is shrinking. China's population shrank. India will come there soon too. India will come there by 2035 in the south. All projections say that population is shrinking.

1:24:51Today, we've got 13 crore people above the age of 60. By 2030, it'll be 20 crore people out of 145, 146. See, you know, talking about people and we were talking about people in the company. You were in the HR. You had the HR department, right? You don't like people, but you were the head of people. No, I like people. I know, I'm just quoting it here. I don't enjoy being with too many people all the time. But you hired too many people Well, and you've seen a lot of people's growth, right? In your company. Tell me one thing. And if I'm not wrong, there were about 200 ,000 people who you ended up hiring.

1:25:28200 ,000 people trained 250 ,000 people. See, what is the difference between somebody who like really succeeded in the career was there somebody who didn't at the same place who was both hired as a fresher? Self-motivation. Self-motivation. Something within you, it drives you. Can you spot it in people? Partially, but you know, it takes time. It happens for a time. Some are very glib and talk and impress. Some are very quiet, don't open their mouth. So you have to see, I had a very nice colleague, Vinayak Pai, who used to work with me in finance. That guy was brilliant. He didn't talk too much.

1:26:06But you know, I used to demand a lot of things, data, guitar. He used to slog his butts out. It came to a time when I opened my mouth and started a sentence. He finished it for me. He understood exactly what I wanted. He did it. That guy was brilliant. He burnt out. He looked burnt out very far. But you know, he was brilliant. So the difference between high performance, self-motivation. See Raj, unless there's something driving you, motivating you to do great things, you'll not do great things. You'll slacken. It's something within you that pushes you all the time. But what makes those self-motivated people stick to a company at a very base salary?

1:26:40Because the company gives them prospects to grow, to learn and to do things. But at any time, there'll be other people actually trying to post them. but they still stick there. They stick there because they learn. They get opportunity. They get treated well. They feel fulfillment. Till that time comes when the delta between expectation and reality becomes too wide. That is where you must recognize people at the right time. I keep telling people, you can suppress a good person for a year, two years, not more. You recognize them. They stand out, no? If you have the boss of a team, you know who is the hard worker, who is that.

1:27:10You want to keep him. One year, you'll not do it. You'll play favorites. Second year, you can't do it. Then you say that third year, this guy is so valuable. lease, I am dead. So you do it. Correct. Agreed. It happens. So you can't suppress him forever. And then they go. Attrition among high performers is the highest after three years. Why? Because people don't... Anybody goes outside, they get double the salary. I keep telling my MNC friends, you must hire coach the top 10 % people after two years from these IT service companies. Pay them double the salary because then you don't have to spend on training.

1:27:43You'll get the best performance. Ask them whether you're in the top 25 % time, what is the ranking? And poach and pay double. Good for them, the MNCs, good for these companies because they have to learn to pay better and do better. See, they learn to pay better, they do better. But they have to pay more at the bottom. And then how do you do the conversation, let's say somebody who comes to you and be like, hey, I'm getting double the offer outside. I persuade him to stay to say how we'll do well here and if I can't, tell him, okay, you decide what you want to do for yourself. Even though if you know that this person is high-performance.

1:28:15I wish well for him. I wish well for him. But don't you then increase your salary double? I can't do more because I'm stuck in a thing. You know, it's comparative misery. See, India, we work on the theory of comparative misery, Raj. It doesn't matter what I get. So long as somebody doesn't get more than me. So I give him so much more. Everybody gets miserable. So what do I do? I tell him, look, I can only afford this much. Okay, go ahead. Be best. So many people who left, who worked with me, they wanted to be CEOs. And Murthy had a fight. Why are you letting them go? They should stay here. I said, we're not going to make them CEOs.

1:28:46They want to be CEOs. Let them go. It's okay. Infi has about 250 CEOs, people who become CEOs of small, big, medium companies. Two of the biggest or top five come from Infi, Cognizant and Tech Mahindra. I'm so happy. Even though the person who runs Infi comes from outside. But you know, it's okay. So many good people are left. They become CEOs. I see them. I meet them so many places. I'm so happy for them. But don't you? okay actually turn it around for entrepreneurs who are watching this okay what should they do in their companies well they must make sure see first of all should they increase the price and actually hold them because they know that this is the most important people see Raj in any organization one or two percent are the critical brilliant people who keep the company together you have to identify them and reward them with stock options and decent salary and you must also not give us a too high a salary then they stick because they know that both of you are aligned and treat them well with respect give them scope to grow swallow your pride when they come and argue with you and they are right swallow your pride and say you are right pat him on the back look Raj if you are a good manager it's like running a cart with a horse you put a car you know carrot in front the horse is there push the horse horse keep running carrot is still in front you understood yeah so that's how we incentivize people give them a carrot and do it and do it and make sure at the end of it they do very well.

1:30:15We had the largest stock option plan in the industry in India. A lot of people make money. You know what happened? A lot of people said I made money on the left. No motivation. It works other way too. Raj, you make too much money they leave and say I got to enjoy my money when the going is good Raj. So it works both ways. But the happiness says you created so many leaders you did so well the people know doing well. You know you take happiness joy for this. You do that for 1-2 % people. What do you do for the next 10 %? Because the other 70 % you're okay to attriff. Pay them reasonably well. And what we did in Info says, we had a variable compensation.

1:30:51So they used to come to me and say, I want more, I want more. So we did one. Your 100 % salary, we gave 50-60 % variable in front of it. So it become 150%. And the variable depend upon revenue, profitability, achievement. Some people got 105, some people got 20. But when they went out, they wanted 30 % on 150. Made it very expensive for others to hide. so you have to have variable compensation depends on performance where people can make more money and many make more money many don't make more money the average works out for the next 10-20 % true but the CEO compensation should not be absolutely high that is the key but today that's the norm the C-suite is so expensive they must get stock option they want more money and more stock option it's not going to work then entire cost structure goes away and then how can you tell a person not to lead the company when it's getting 25 % more you're not able to give and your salary is 5x.

1:31:47You don't have the courage to say that. Leadership by example very painful. That's what you got to follow if you want to be a leader. It's painful. As a leader you got to work the hardest come first to office go take the greatest pain take responsibility. That's how you get respect. So how many people respect the CEO who gets fat salary doesn't come to office and has a great life? No, no. Obviously not. See respect for a middle class person, the greatest asset that you can have. Respect. And respect come and people believe that you're a good leader. You take the pain. You don't force people to do things that you don't want to do.

1:32:22True. Coming back to your startup journey. You invest in so many startups. You said casually that almost about 700 people walk in your office asking for investment. Yeah. Right? So they send you pitch decks. Let's just say that. So almost 700 pitch decks a month. tell me one thing, very specific pattern of what they're doing wrong. Don't tell me what they're doing right. Like what are startup founders doing wrong? First of all, it is for 314 Capital. I'm the chairman there. 314 Capital has four partners. Pranav, Siddharth, Anurag, who's here, and Nitya. It comes to them. They have a team. They do everything.

1:33:02They got technology to see when they got database of 45 ,000 companies. They see it and they have everything. But I used to invest earlier and I used to do it for many people. They first came to me 10 years ago and made a pitch, we're going to have fresh meat and all. I threw them out. What will you do? I asked questions. They couldn't answer. I thought they're not going to come back. They come back out 10 days and answer everything. So I said, okay, 50 lakhs. No document, nothing. 50 lakhs. First check. They raised two crores. I gave 50 lakhs. Then every round they came and we gave them money and Pranav and got along with them.

1:33:32So if you look at my view is, if you look at all of them, the people who don't succeed, don't have a raison d 'etre for the business. It's just a pitch deck saying, I'll do this, I'll do this, I'll do this. I'll start a social platform. I will run this, I will do this with no real merit. Second, they have no technology or managerial capability. And the third thing, third thing is they don't impress you either in that pitch, which has to be concise and impressive, or when you meet them and talk to them, there's no passion, energy, or thought or technology. So you make out. Have you put in some money in somebody just out of passion?

1:34:15This founder is super passionate. I don't care. When I did, when I used to invest directly, yes, Ishra Pranav and Anurag, I think they've also done it. They told me they've done it for many people. I've done it. Who would have, you would have done it for? I've done it for Licious.

1:34:33You used to? Pranav did it for Rippler, which is done very well. Done it for Kapiva. You were one of the biggest backers. One point of time. Like backers for Baiju's as well, right? Yeah, Baiju. Baiju, we gave a check. Passion, energy, that's all. Baiju was an unbelievable guy. Great entrepreneur. What energy. Brilliant guy. Went wrong. Went wrong because he didn't have a board. He raised 6 billion. The board was very happy because Alish is going up. They could not control him. Then he went and made some acquisitions. And the board, some investors promised to give money. They backed out. he had to go borrow money he lost respect for them and then it all went downhill I tried to help out didn't work great entrepreneur did you at any point realize between 2016 to 2022 that I made a wrong decision for whom?

1:35:20for Vyajus we had finished investment you know we didn't invest after that no but after looking at him and be like hey I put my money on the wrong horse no we got our money back we made a lot of money we sold early we sold early within 3 years first chance last chance we had 1 % we got more money for the 1 % then whatever we sold earlier we made money. We sold money at about 12 billion valuation. We got a You got out. We got 60. Yeah, we did because we're so small we said we won't be out. Not that you have gone bad by then. But later we went bad and he called me and asked for help and I helped out tried to bring everybody together.

1:35:55I and Radish Kumar sat down what it didn't work because the future was too much. The trust was broken. But do you do you personally like can you recall a point where you thought maybe this is the point where he started going wrong? Yeah, the point where he went wrong Like you realized it personally but you didn't say it publicly. No. You see, I'll tell you the big a very big founder of a very big technology company his family officers wanted to invest in that. Okay, much earlier. Third or fourth year. They called me and said I said what is the opinion? I told him look he's a great entrepreneur he's everything he's very indisciplined he'll not give you your financials, he'll not give you any numbers, he'll not give you any information.

1:36:37That you've got to manage. Otherwise, a great entrepreneur, he can execute, he can do very well. I told them. The point where I realized when I stepped back is, when he told me he's going to do certain things, and he didn't do it. Once, twice, thrice. Then I said, man, it's not going to work because you have no intention of keeping your promise and I don't want to work with you, it's gone. So he's living in delusion. The things are going to be better and better, but it's not going to work out because he's not doing what he promised to do. because when you promise when you meet people they want certain things you promise you do it but you know he was not agreeing but not doing it and I said what is the point nothing I can do after all I voluntarily helped him I had no stake true I tried to bring people together didn't work what are the categories today you are bullish on where young people should build AI apart from AI or maybe just go niche in AI because everybody is saying AI see fintech in AI fintech in health I think I've got fantastic prospects.

1:37:35FinTech in health meaning what? FinTech in AI. I mean, AI in FinTech, sorry. AI in FinTech, AI in health. Okay. Because there are great inefficiencies in both. And I think you can do really great work in both of them. Give me a specific pain point that you see. Probably somebody can build it on it. No, I think in, for example, in FinTech, you look at how they make, you know, how can you evaluate the potential of an asset to go bad and monitor assets to go bad. So AI can look at a database of all the lending for the past five years, look at all the cases that have gone bad today, look at all the data in all the accounts and the information, and look out for signs and patterns which led to the account going bad because the signs and patterns.

1:38:16For example, when you monitor an account, the credits in the account become lesser and lesser. That means cash flow problems are there. The debits keep increasing. Utilization of money keeps going up. Delays start building up. So you check up in a portfolio what are the signs, and you have the radical science. And then you use AI to monitor accounts, say which are the accounts generating all this. And then you work on that before it blows up so that it can help you out. You can't do it without this thing. And I'll tell you, Vaidya, CEO of IDFC, told me something, what he has done. Brilliant man.

1:38:46I was shocked at what he has done individually. He said, look, I got 12, 14 million consumers. A large number of them don't pay on time. I have to remind them. I go to a call center and everything. It takes me 30 days to remind them. Now I build a chatbot and look at the chatbot. It talks like you. It is intelligent. It does everything like a human being can't make out. And now within two days, the chatbot talks to everybody. The chatbot is an agent. You can talk to 10 million people, 10 million calls simultaneously. Human beings can't do that. Look at that. And then I met a person who was doing quality control by data vision, by computer vision.

1:39:21And he can do that. And he said, I can do that. I can use AI to look at all the faults and everything. the AI can do it. At an assembly line, I can do it. I went to a factory where there are 120 women who are doing all the things. And I can replace 100 women. I said, don't replace them. Train them to do other things. Don't replace them. What I said, I can do? Look at the efficiency. So if you look at all aspects of working in financial services, you can bring in AI, use AI to analyze data, do everything, find patterns, the jiffy, and learn so that you can remove the inefficiency and reduce costs dramatically.

1:39:54That means volatility of business can come down and velocity can increase. True. That's what you got to use. This is an opportunity for every entrepreneur inside the business. Yeah. But is there... Inside the business means you need providers who can create the technology, no? How can you... You think every enterprise can create the technology? No. You need outsiders who come and say, we got a company, you know, company vertical loop or something like that. Anurag will know that. Where they, you know, they sat in front of me, look at all the data, database, they have a database that have come, ask some questions and they ask the AI, and they spit out answers.

1:40:27I was shocked. Look, I know data. I understand strategy and I ask questions. I was shocked that the logic and everything else came out of the database. Yeah. I was shocked. That means if I'm the CEO, what are the biggest problem? I don't get enough data. I got questions to ask but I don't get answers. People have to go back and work at it. So I want to interact with the database using AI. We ask the AI, tell me AI that, you know, in the next one month, what are the probability I'll reach my numbers based upon whatever inquiries are there. It'll work out everything, collect the data and tell me the probability.

1:40:59And I say, why is the probability so low or so high? What is going wrong? He'll come and give me the data. And I look at my cost structure and say, why is the cost going up? And come and give me that data. It's amazing what it can do. But you see, technology should be your servant. You should not be your master. And technology reduces the barriers to flow of information, barriers to analysis and speeds up your work. See Raj, you can become five times more productive Raj. You are a brilliant guy. You are a founder. You run this business. Everything is there in your head. Everything. But you need data.

1:41:33You need impression. For example, you'll have this broadcast. Then you know the broadcast, you'll ask the AI, based on this broadcast, based on this person, what you have said, which of my audience would like to know in what manner, blah, blah, blah. And you'll spit out something. And you'll analyze all that and say, is it correct or wrong or whatever it is. Then ask the AI, why did you come to this conclusion? You said the pattern is this, pattern is this, pattern is this. There's a thing. But you got to have the brains to ask the question. Before every podcast that we put out, before preparing this research, my AI gets about 350 data points and then it gives me data on that and gives me pattern recognition.

1:42:09Yes, see. And you are able to analyze the pattern, analyze the nuances and know what to ask. See, that is your brilliance. You can't reduce what is in your head. You can't be a dumb guy. because it gives you something. How do you know it makes sense? You should look at it and it makes sense. Correct? For example, that mythos or something is unbelievable. That AI done by, you know, anthropic mythos, it'll go into all your software and find out all the places where the security leaks. Man, you're all exposed. And then, suppose a criminal element gets that, they can push it into any financial system, get all the loopers and go attack.

1:42:47Man, the whole, everybody's naked. Yeah. Huh? It can only happen because of AI. I'll tell you, as part of a as part of a fintech committee for a major country, then I was there we're talking about AI. Then I asked to everybody, if a criminal network gets hold of quantum computing and uses AI, can they break into the network of all banks? He said yes. In a second. And all the criminal networks are possibly broken into networks, they've got passwords and everything of everything. They can't break it because of the crittata. They can break it now because of the AI and the super speed. The world is scary.

1:43:24Suddenly everybody is naked. Can somebody, can they use AI and quantum to break into nuclear codes of countries and take over nuclear network? Man, that question you ask, you shake, you don't sleep. How do you protect yours against mitos? If the Israelis take the mitos or something and go to that, you know, go to all the new controls of Iran and blow it up, automatically blow up itself. self-actual what happens yeah I know they're doing it and some of it is coming it's coming something will happen like this and mitos will leak the genies out of the bag they leak everybody's scared yeah everybody's scared and even the large tech companies with insane data now they're incentivizing people to use more AI so more people are giving exposing their own data the danger of AI has not been understood by the corporate sector it is productive it's dangerous so they must all put up barriers and put up protection and put in cyber security to make sure it doesn't overrun them and doesn't give access to criminal elements and misuse.

1:44:27Yeah. Yeah. That is. And even on the smaller scales like you're talking about large, smaller scales, everybody's credit card to banks is going to be out there. Out there, yes. You'll be maxed out like this. Yes. That's why, you know, I was in a meeting in Budapur where they all came, bank chairman, bank CEO came and give everybody credit cards. I said, don't give me a high limit. I don't want a high limit. I'm very scared to use a credit card. I want a credit card at the low limit. I'm scared, Raj. Raj, I look at my accounts, my personal accounts every day. I get messages. I look at the balancers.

1:45:05I reconcile. I look at the monthly accounts. Every month, I look at my monthly account. Look at all that. I still do it. But are you scared because your CFO brain styles you to? Yeah. I understand the risk. I understand what could happen. I don't want a mess to happen. Tell me as a CFO because it's an interesting question. Tell me one framework or like Fiverr Sync data point which every entrepreneur should know on a monthly basis for sure. Well, first you must get your monthly information on the last working day with 99.5 % accuracy. Okay. See, in the e-commerce world, you know, people say I'm going to challenge you on every point so that people can get in the e-commerce world because there's so many reconcilation and so many pushbacks It's all rubbish.

1:45:43It's all electronic. It's all rubbish. It's all electronic. No, other platforms they don't give you enough data so soon. You take like 7-8 days for... You don't need 7-8 days. You can work on the system to get it because you can estimate all that with a great degree of accuracy based on data. We also estimate it. We are 30 ,000 projects running at the same time. We could estimate. Okay. Don't give me all that. That's bullshit. I asked one of the entrepreneurs of one of the digital new-edge companies, why the hell are you announcing results after 45 days? No, no. I finished only after 10 days. You ask your CFO to give it in the last working day.

1:46:12He'll give it to you, man. Go ask him. Then he said the auditor is saying, I can't do the audit, I can't do this. You are a new-edge company. You are about 10 billion. You are releasing results of 45 days. What shit is that? You should be releasing within 5-6 days. HGSE Bank releases within 16 days. SBI within 30 days. Why can't you release within 15 days or 10 days? Give me a break. HGSE Bank has got nearly 10 ,000 branches, man. It's a very complex bank. Infosys does it in 1 week, 10 days. TCS does 2 ,70 ,000 crores of revenue. Global operation, they do it within 11-12 days. Audited, done. Why can't you do it?

1:46:46It can be done. Do it. As an excuse. Fair. All the things can be reconciled. For example, every bank using Finacle, they shut down at 12 o 'clock on the last working day. By 6 o 'clock, they're all that trial balance. Everything is done. Everything is reconciled. It's in the system. They know the results. Why do you think they announce total deposits, total lending in two days? Remember? Now they're announcing everything. Where do they get the figures? Okay. And that is one. Okay. One is MIS. Agreed. Okay. You shut me down. Second, the most important thing in a business is two things. One is sales projections and one is cost.

1:47:24Okay. Okay. Sales projections depend upon the bank of prospects, the probability of success, and what stage it is. Have you met and has come close to getting an LOI, getting a term sheet or whatever it is for the sales business? So you have to develop a probability chart where you write all the clients, the total business, what you have bid, where is the stage, what is the probability and all that. That you monitor every two, three days. Transaction to make sure in B2B you're able to reach your numbers. And when they're not going to meet your numbers, it becomes evident 10 days before. To save the transaction dashboard.

1:48:00In your B2C. When you B2C, you know the number of transactions. Transactions happening every day. And you have budget versus actuals. You know what is the run rate. You know what has to be achieved. You have to monitor every day to make sure. And if you're running beyond schedule by one or two days, you got to see what happens because that is on the sales side. That's the most important thing. That's the variable that depends on outsiders. Okay. And then on the cost side, you know your total cost of acquisition, you know your costs, you know your budgets and everything. You monitor all the costs by accrual, by accrual, not by payment.

1:48:31And you make sure that you provision it so that every 10 days, every one week, you know all your cost structure. Keep an eye on that and make sure that any one-time cost like a bonus for the year, like a warranty charges, anything else, you monitor it and you keep you you monitor it and accrue it throughout so the accrual things also happen okay so you're able to do that so if you have to review it every every week every 10 days to know what a sale is going your revenues are happening your cost structure then you're on top of it that's it and you finish it by month end for the second of the month you should know what happened the previous month with rhythm accuracy then you see the projection for the next month see where you succeeded where you did not succeed and what needs to be done to review and to put in more effort and put in more marketing dollars or whatever it is.

1:49:13So next month doesn't happen. So I tell everybody, you must have an eight quarter rolling plan. Projections. Eight quarter. Eight quarters. Eight quarters. Okay. So first one quarter, when you're beginning of the quarter, you should have 90, 95 % accuracy, probability, only 5%. Second should be 80, 85%. Then next will be 70, 80%. So you monitor month by month, finish the quarter. And once you finish the quarter, you see in the next quarter, what are the mistakes that you've done by the second month of the quarter and make sure try to rectify it, become bigger. So the next quarter becomes less.

1:49:43And when the quarter is over, you renew the quarterly report everywhere and you try to finish it so that you have a roadmap, everything, because the response time becomes more and more as you become bigger and bigger. And you have to monitor it and have a mental model in your mind. The moment you have a mental model of the CFO or the CEO, you know that this thing happened, this thing happened, this day, this day, this will be the impact. It comes to you. So by seeing visibly, you know what is happening. You should be able to read it. That intuition you must have and that you must have. For that availability of information is required.

1:50:13Some analysis is required. And some systems have to be built in. Interesting. Okay. And then you balance. I'll tell you one company. Funny story about balance. Go ahead. You know, Murthy came to my room one day after a NASCAR meeting and said, Mohan, how much cash do you have in the bank? Well, 25 ,000, 30 ,000 crores. Now we are a cash rich company. Okay. I'm sure it is there. I said, what? Why? No, no, I went to this meeting. People were talking about Palmala, Palmala, the Italian company. They had one and a half billion dollars of bank deposit. The later they found out it's not there. I was shocked.

1:50:50I also read that, but it didn't occur to me. Then I said, you know, are you going to be in office day after? He said, yes. I said, I'll go to the bank today, withdraw all the cash and come. We'll bring it to office. Both of us will sit and count. What else can I say? Then Satyam happened. And we worked with the regulator to make sure that audit writes the bank, gets the independent fixed deposit receipt and then we disclose in the quarterly reports where are the deposits, which bank, how much is there and all that to improve the system. We did that. See, and then I told him it never occurred to me something could go wrong because if the thought of doing wrong doesn't occur to you, not do wrong, Raj.

1:51:30If the thought of doing wrong occurs to you, for example, Satya, Raju used to have a group of people outside sitting and cooking up their accounts. That's why you saw the famous cartoon, right? Raju cooking and the CFO and others cutting very table. They were cooking up. It was happening for long. And the signs were there and the auditor was stupid not to catch it. It happened too much and they had very great corporate governance leaders who never did anything useful, I guess, and it was a mess. But you know, it happened. So these things have happened. So we've got to be very careful. The thought of doing wrong should not be in your mind.

1:52:04You know, You said something very interesting. Auditors should have caught them. I want to take this opportunity to squeeze in a question about systems and catching up. Like recently, TCS incident happened, the controversy. You saw that? Like that for four years, sexual harassment, forced religious conversion, bunch of things were happening. It's a failure of system and process. I went public to that. So it is a failure of... System and process. First of all, it's a remote outpost of the empire. Only 5 ,000 square feet, 150 people. I guess the oversight was lax. Point number one. And second, And second point was, senior people should have a skip level meeting with people that never came out.

1:52:39Okay. And the third thing possibly was, they must look at chatter on the web or whatever it is, to see what is happening. The oversight was less. So these things happen. No, but if something like this is happening in a company like TCS, what do you think is happening to the small companies where like so many other people? All big companies, small companies will have something like this blowing up once in a while. Okay. Because the system processes, oversight, something slips to the crack, It happens. It happened to INFI for the sexual harassment case long back. Now, what should they have done?

1:53:10That's what. First, the day it happened, they should immediately announce to everybody, we have been told about this, police have come, we're setting up a team to investigate, we're supposed to do this, we will make sure things don't run on. They took four or five days to do it. Then they asked the chairman, the chairman should not have done it, HR should have done it. They should assist the process to develop credibility. Things will go wrong, Raj. Fraud will happen. In best of cases, something will happen. And it's unintentional because systems and processes will not catch it. Because system and processes are there, they don't stop it.

1:53:44They should do it. And you need good people, Raj. I know a company, I don't name the company, it's very close to me, where the CEO took a holiday in a plane and sent the bill to the CFO. The CFO refused to pay. It's at a personal expense. Then he went to the chairman and the chairman signed up and said, pay. The CFO said, I won't pay. Let it go to the board because the board policy is no personal expenditure. Look at the CFO. Nice. And that guy was hanged. They went after him. I'm telling you. He was sacked? Well, they did a lot of things for him. That guy was my boy, was my colleague. That comes from here.

1:54:27See, the CFO should walk with a resignation in his pocket any point of time and stand up for his principles because the only asset he's got left is the trust and confidence that he has because he is the guarantor of the fidelity and the financial accuracy of the financial statements. At what point do you think a startup should hire a CFO? Well, a startup should hire a CFO once it becomes bigger, they got more money and they can decide what is big. What is big? What do you think? Look, there's no different thing because they know. Or maybe like a very stringent finance process apart from just a founder.

1:54:58No. See, I... If not CFO, just like a finance guy. I believe every team should have three people. A visionary who is a strategist, who is a CEO, founder. One who is a hustler, who is a selling guy, sales guy. And one who is a numbers guy, who is a CEO, operating guy. That's it from day one. You should have a team. Otherwise, one person should have all the ability, which is very rare. Yeah. So I think the team is... You must first make sure you don't lose money, don't blow up money. You always ask questions when you make. So many people think money is unlimited. I've been to some other startup where we understood.

1:55:36Then I said, why are you blowing up money? Why? No, no, no. That venture capitalist told me, you got this money, blow up. Then you go for the restaurant, get valuation. I'm spending money, I have to grow. I'm not getting growth. They think pumping money, growing money, growth. They're the adult. They're mixed up. I want this country to have 1 ,000 billionaires by 2030. I keep telling every young person, Every entrepreneur, your trip in life is to become a billionaire. And don't ever become an employee in a startup. Don't dilute money. Don't blow up money. Work very hard. Be frugal. And grow. And your entrepreneur should have a large stake.

1:56:10Don't ever dilute too much and blow up. I keep telling them. That's a trip in life. So many people have built big companies, built multi-billion dollar companies. Ask them, what is your stake? I got 2%, 3%. Man, you screwed up your life. Why did you do that? What to do? I didn't know. They told me dilute. I did it. I got valuation. Thank you. You seem to be very passionate about. Look, I want these guys to do well, Raj. I know. I want them to become billionaires. I keep telling everybody, your trip in life is to be a billionaire. Don't be like me. I never made a billion. I work for my company.

1:56:43I work for the country. I work for everything. Sacrifice everything. I got paid very less. We didn't fight for salaries. Is that okay? We should give other people. Don't be like me. Holy good, you were very strongly. No, I'm telling you, look. See, I'll tell you why You must become billionaires to do well Because the power of money is the power to give away I wish I was a billionaire I would have given away so much money I want to build hospitals, I want to build schools My life's ambition is to build a great university Like Stanford I don't have the money If I had money, I would do it I want to do that, that's my legacy I don't have the money, I worked very hard I made money for everybody The day I left, the market fell down 10 % as CFO.

1:57:27And it came down by 20 ,000, 25 ,000 crores.

1:57:33So I, sometimes I feel I've done so much. I'll build a university like Stanford. It'll take 30, 40 years, but the dream, because he can pull up the country. See, Raj, we have to invest in the top 0.1 % of India to pull up India in innovation, in technology, scholarship. That is what is pull up India. Today we invest 10 lakh crores at the bottom of the pyramid. 4 lakh crores subsidy by government of India. 6 lakh crores by the state. My state gives 1 lakh crore. Tamil Nadu 1 lakh 42. Marast 80 ,000 and all. You can count it out. But do we put 50 ,000 crores in innovation? No. I keep telling them put 50 ,000 crores every year for the next five years into innovation, into startups, into technology.

1:58:17You'll see India go up and India will become much better off. Our young people become greater entrepreneurs. There'll be greater technology. put money into innovation put some money you were talking about Karnataka you've done two tweets which contradicts one is you said Karnataka gives more to center than it receives and then you said delimitization is a ticking bong it's going to happen so if it will happen and South should accept it the moment they accept it it means Karnataka will have less representation what I said is that the statement they put on the thing See, Kannadaka collects more tax than what it gets?

1:58:55Collects. If I got a port, I collect a lot of money and customs. Doesn't mean it's for my state. It may go outside like Bombay. If I got Infosys there, the corporate tax comes collected here. But Infosys got operations all over, earns money all over, money comes here. State Bank of India is Mumbai pays 25 ,000 crore tax. Doesn't mean in Mumbai only earns the 25 ,000. It's collected. So we worked out a report in the 16th Finance Commission saying how much is collected and all that. So the total amount that collected actually based on state activity is lesser than what our CM says. But the fact is, Karnataka got a lesser share based on the formula.

1:59:34Arunachal Pradesh gets 1 ,30 ,000 rupees per person from central government. Karnataka gets 7 ,000 rupees. That's the injustice. So I get that. So Karnataka gets less. But now in the 16th Finance Commission, the share has been increased to 4.11 % from 3.7 % some things have been done in the 14th finance commission it was brought down 15th finance commission it was brought down 16th has gone up a little bit so no no no my point is this is one side and then the other side of story is you said see ticking time bomb say that what is that you said it's a ticking time bomb see delimited ticking time bomb what does it mean the constitution says very clearly every 10 years you have a census and the delimitation to adjust the seed in the Lok Sabha and the state lists based on population because we have one person, one vote.

2:00:23Yes. In 1975, I think Indira Gandhi froze it based upon the 1971 census for 30 years. In 2001, when Vajpayee was the 2002, they postponed it by 20 years but had delimitation and in the delimitation, urban India, rural India, it was adjusted, seeds were not increased. Now, the 20 years is over, 50 years we have not done it. Now, the next census is happening, based on that as per the constitution, we have to reallocate seats. That means the south, which was 25 % of India and 71 % has become 20 % of India. We'll get lesser seats based on population. North will get more seats. That'll happen if we don't do anything.

2:01:01That's a ticking time bomb. But the bigger thing, Raj, which people have not understood, see in 1971, the total urban area was 21 % or 26%. In 2001, money is 31%. It delimits happen. Trudel will be 45-50%. When the census happened, delimitation happened, urban India could be 45-50%. Urban India semi-urban could be 45-50%. Political power will move from the villages to towns. So towns will become more important. They'll have political power and more money will come to towns. The whole area of politics of rural, giving farmers subsidy, subsidy, because there the waters will go away. So politics will shift radically.

2:01:42They have not understood that. You understand? That is what will happen in the new, this thing. Whether it happens on 540, 850, that is the consequence. So India will be a better country because urbanization is the key to development. Urbanization is concentration of human activity. Concentration of humanity leads to specialization. Specialization leads to higher productivity. That leads to higher income. We are not an agricultural country. There are 600 ,000 villages, 25 % awakened. No young person wants to work in agriculture. 70 % of farmers I read say that the children, they don't want to work in agriculture.

2:02:15So we are now, political power rural areas, urban area pay taxes, we've got shitty life. In lacrosse, you pump into the rural areas, we get nothing, we get shit. And our quality of life comes down and we become less productive. Now that is going to change. That is the biggest change that will happen in India. Whether you do for 543 or 850, urban India will get more. That will transform politics for the next 50 years. That's the good news. True. None of them understood that. and urban people vote very differently where is my road where is my power where is my traffic why you are not demanding correct infrastructure quality of life education okay here's my last question okay so thank you so much by the way for spending time and guiding me through economy and country and a lot of other things and infosys stories so last question is usually what what we are trying to do is I want to ask you about a very specific thing but with the board on okay so I can just bring the board and I'll ask you sure it's a very specific I want you to give me a framework for that choose a random number 53 okay so if you had to start your life again today from zero from here what will be the exact one or two steps that you will do to reach number 53 which is half of your life you have to be half as good as who you are today.

2:03:40What exactly steps would you take to reach that? Like step means what? Like if you're starting from zero again let's say you're 17 year old again and you know your life I'll become an entrepreneur. What first thing you would do think about right now if you were 17 today knowing what you know. If I'm 17 today I will do STEM okay? Okay. I'll finish engineering work in the latest technology and have two or three other people create a product and become an engineer and have a startup and I'll become an entrepreneur. And what specific skill would you want to know? Whatever the latest skill available at that point of time.

2:04:16I don't know because, you know, today is AI. So I'll become an AI specialist. But engineering, and why would you specifically choose engineering? Because with STEM, as I can, social sciences are being a chart for finance person. I can create a company and create a product and sell. Because finance is a derivative. Others, I've got to create a lending company or a NBFC or something which I don't want to do. But I think the leverage in using new technology innovation is the highest right now. So I will start that with a team of people and I'll become an entrepreneur. But wouldn't that STEM,

2:04:50the edge which STEM people had has gone away because now you can do things with AI. Because application of AI is more important than the AI itself. AI becomes a platform. It's like UPI. UPI is a platform. I created a product on top of that. It's Aadhar. Aadhar is a platform. It's identity. I can do something on top of that. So that's what I'll do. So you will become an architect. I'll become an entrepreneur. I'll not be a manager. I'll be an entrepreneur. I'll work for myself. I'll have a very large stake and I'll become a billionaire.

2:05:22I'll become a billionaire. I'll become a billionaire by 30. Okay. And tell me one shortcut that you would want to take. Shortcut means what? To fast track your way to become a billionaire. Well, I'll fast track my way of a billionaire by identifying investors who can back me, who have got high aspirations, who have got connects and who have got visibility so that they're coming into my cap table will enable me to attract money from outside and become a billionaire faster. Give me three names who are these ideal investors today. Well, today 314 Capital in India. That's one. Of course, you're going to promote yourself.

2:05:58Okay. And I'll try to get money from either Zuckerberg or I'll get money from Elon Musk. they'll get me this thing but they don't actively invest yeah but the name is important but tell me someone in India whose name would help you in India look maybe I will take it from Chris Gopal Krishna or Nanda Nilekani okay I mean it's a good name or you know good name okay or Keta Maram good name but he's not going to give me the same thing as Elon Musk or this of course not and third and third name third name I will very soon go to a KKR or somebody else who are very, very big. So they are the institutional side because they know how to squeeze the last drop of blood out of that to earn great money for themselves.

2:06:46But then if you get them early on, they're going to squeeze blood out of you as well, right? No, I'll make sure I'll get about 50-60%. That's the condition. That means they want more money, they better pay me money to buy. But you'll not go to another venture like a startup fund. You will go to private equity guys. Startup fund in the beginning. I need a startup fund in the beginning because I got to build. And to be 314, Pranav and Siddharth, they are the best in the industry today. No, because I see, I'll tell you, not because I'm the father there, I'm part of it. Because their culture is to nurture the entrepreneur and help the entrepreneur to grow.

2:07:19It's a very unique culture that they built up. We can talk to Anurag, he'll tell you to how many firms have the culture. They're not bothered next valuation, which is important for them. But how to nurture, how to connect, how to get people, how to build system, how to make sure they use technology and help them. that is a very unique culture that they have built up that is what the reason for their success and then what would be one mistake you would avoid which you have made in your life the mistake I would avoid is to make sure I build a product for the globe and not India because the globe is 125 trillion dollars GDP India is 4 trillion but if you make it for globe do you get money here in India I'll get money in the beginning but then I'll go raise money globally you know Elon Musk and Zuckerberg somebody will be iconic which is a fund.

2:08:03They're all global funds. I'll go sell in America. American dollars, Indian costs. Brilliant. So the goal is only America. That is 34 trillion. There's 4 trillion. There they'll buy technology, pay me five times what I get in India. And I'll do it early. And if someone's watching this, just one last thing that how can they actually identify what America needs today? What products will be built? Well, in deep technology, I think the, you know, AI, how it solves, you got to see what is your technology, what problem is it going to solve? You got to identify the problem, understand that that is not very difficult for people to know technology well.

2:08:45Okay. But it is understanding of technology won't solve nothing. You need to understand the problem. You know how technology is moving. You know what is happening. Look at all the new things that have come. What did Anthropik do? Anthropik came out of, you know, ChadGBT, you know, open AI, right? Then what did they do? They did code writing. Code writing they wanted, but they did it faster. Then based on that, they built everything, right? Got it. Well, thank you so much. Thank you so much for watching this episode until the end. Now, you have to do three things. Number one, subscribe to this channel so that we bring you more valuable guests and we ask them and we ask them what you want.

2:09:26Number two, tell me in the comments that you have and who guests want to see our podcast so that we take them and ask them the questions you want. And number three, you must have to share this episode with anyone with a person, which will be a positive change in life, because one conversation is enough for someone's life. I'll see you next time. Until then, keep figuring out.

2:10:00Thank you.