"Open and ethical trade brings prosperity to all”, says TV Mohandas Pai
Shri TV Mohandas Pai, is a well-known institution builder & wealth creator. He is Chairman of Manipal Global Education, Chairman at Aarin Capital and Co-founder of Akshaya Patra Foundation. Earlier he was a member of the Infosys Board of Directors and Head of Administration, Education & Research, Finance, Human Resources and Infosys Leadership Institute. He was the Chief Financial Officer of Infosys from 1994 to 2006 and was instrumental in transforming Infosys into one of the world’s most respected and widely known software service companies. He was awarded the ‘Best CFO in India’ award from Finance Asia in 2002 among several other awards. He has worked extensively in the education sector. He is also a well-known speaker who believes that Economy and Finance can be managed well with the Indic value systems.
In an exclusive interview Shri Mohandas Pai speaks to Organiser Bengaluru Bureau Chief Prashant Vaidyaraj on wealth creation as per Indic systems, reasons for the downfall of the same, our education system and youth. Excerpts:
TV Mohandas Pai
Q: Contrary to popular belief, in the Indic value system, prosperity was part of the purusharthas.
A: Throughout its history, India has been a free market economy. As per Arthashashtra, we believe that trade is essential to create wealth. State or a kingdom becomes wealthy only through trade and trade brings prosperity to all kind of people. We were an artisanal economy and were the most prosperous country in the world ever since civilisation started till about 1820. India and China made up for 45 per cent of world GDP because we believed in open trade. Foreigners came to India to trade to participate but slowly by misusing trade they conquered and colonised us.
Q: In the post-Independent Bharat, wealth is seen as bad or a necessary evil by many. Why did this happen?
A: In 1950 when we had our Constitution, our founding fathers created a robust economic framework, where all of us had the freedom to do business, to hold property, etc. When the first government tried to abolish Zamindari, people went to court and Supreme Court ruled that Zamindari abolition was wrong and Indians had the right to property. Then the 1st Amendment to the Constitution was brought to include ‘Right to Property’.
A file photo of TV Mohandas Pai
In 1956 Nehru got the Congress to pass the Industrial Policy resolution where it said that the state had a commanding say in the economy and put us into ‘socialism’. Nehru’s socialist moorings came from Cambridge and had a disdain for Indian Business, trading practices and practitioners. He favoured the Soviet model as it came across as a benevolent rule till people came to know about the brutality incurred by the same. Nehru brought in license ‘quota raj’ despite protests from Gandhi ji and Rajgopal Chari. License Raj created conditions which destroyed our entire economic system by creating the public sector.
Nehru ruined all that in a short period so by 1967 we had famine in this country and had to live by the PL 480 food grains shipped from the US. Nehru destroyed economic system, brought in cronyism, brought in regulatory practices and all the ills that came with theseThen, there was indeed a need for the state to invest as we were a poor country but, there was no need for the government to suppress private capital. They could have the state investment and also allow the individual to raise money and invest. Both could have co-existed and competed. Eventually, the public sector should have diminished as the state cannot be a businessman.
In 1950, when we got our Constitution, India was the richest country in Asia like China, Japan and the entire South-East Asian countries were destroyed by war. We did not have war within our boundaries, and we were more prosperous than these Asian countries. We had 1.5 Billion pounds due from Great Britain owing to devaluation. We did not build on that, and consequently, between 1950 and 1982, India grew one per cent less than the world countries. Nehru ruined all that in a short period so by 1967 we had famine in this country and had to live by the PL 480 food grains shipped from the US. Nehru destroyed economic system, brought in cronyism, brought in regulatory practices and all the ills that came with these.
Q: Can wealth creation be a tool to create an equitable society? How do we ensure that the have-nots become financially independent?
A: Everyone cannot do wealth creation. To create wealth, one needs to have an entrepreneurial ability. One should have a strategic mind and enormous energy. A few people have this, and they become wealthy but with their hard efforts. What the state should do is to create an opportunity for anybody, without a license and government clearances, to get access to credit, develop business and become wealthy.
Cultural Marxism has to be fought and can be challenged by opening up our educational institutions with free flowing of ideas, and students can decide what they want which must be respectedPeople with high income must pay taxes. This money should be used by the government to educate people, provide public roads, provide health care to all poor people to ensure that poverty to be removed and everyone had the bare necessities of life. You need a set of people to create great wealth, create big industries and companies, generate jobs, etc. It is the ideal economic situation that should be present in any liberal democracy.
We must recognise people’s ability and not suppress those who have exceptional talent to work hard. Only by encouraging them does a society become prosperous. It has also been said in the Arthashashtra and has also been our economic thought.
Q: Though becoming an entrepreneur and providing jobs is a trend now, obsession with the permanent Government Job is continued. How to change that mindset?
A: When we were a closed economy, there were less private jobs. Everybody wanted to become a government servant. Fewer people were educated.
But today 26 per cent of our youngsters in the age group of 18-23 go to college with the economy expanding. 70-80 lakhs jobs are being generated in the formal sectors every year. India’s economy is doing very well.
We should not forget that from 1991 till 2018 India’s economy grew from $275 Billion to $2.6 Trillion growing at 8.7 per cent a year for 27 years. It is unparalleled in human History except for China which grew at 9.5 per cent. India’s growth has been tremendous.
Resultantly, many people who are children of those who had jobs earlier and had good income and grew in the 90s and do not have to support their parents or siblings. With the family support, they don’t have to look for a job immediately. It a is these youngsters who want to take risks and become entrepreneurs. It is good because now more capital is available, there are opportunities, and new technology is readily accessible. It is about time that they will create more and more jobs in the future. Slowly but surely, this trend is changing.
Q: It is excellent to know that young entrepreneurs are becoming wealth creators and job providers. How can we ensure that we don't create oligarchs and increase the rich-poor divide as argued by the Left?
A: The Left has stopped thinking in the country, and they give perverted reasons. We have to create an open system where there are no barriers to competition. There should be no barriers to free-entry and free-exits, and anybody should be able to come and compete. But when companies become very large and create monopolies like Google or Facebook, we need anti-competition laws to break them up. In our country, we have competition commission which has the force of law to ensure that competition exists and there is no cartelisation and no one entity become so significant to dominate. We do not require an ideology to control it as I believe that the competition commission can set it right.
(To read the full interview, please subscribe and read Organiser, November 11 & 18, 2018)