This is the full transcript of business visionary Mohandas Pai’s interview on The India Story Podcast, January 8, 2026.
Brief Notes: In this high-stakes 2026 update from The India Story, host Vikram Chandra sits down with business visionary Mohandas Pai to deconstruct why India continues to be “pushed around” on the global stage despite its $4 trillion economy. Pai delivers a searing critique of the “tax terrorism” and regulatory hurdles that still shackle private enterprise, outlining a bold “Mohandas Pai Doctrine” to propel India toward a $10 trillion GDP through radical liberalization and legal reform.
The conversation spans the geopolitical shifts of the second Trump presidency, the urgent crisis of urban infrastructure in cities like Delhi and Bengaluru, and the potential for a “reform express” to finally unlock the country’s full entrepreneurial potential. From the hard-won success of the IT sector to the future of AI and manufacturing, this episode provides an unfiltered roadmap for India to transition from its socialist legacy to a global economic hegemon.
Introduction
VIKRAM CHANDRA: Hey everyone. Good to have you on the India Story Podcast. 2025 coming to an end. 2026 beginning. How has the year been? Well, challenging, clearly on the external front. But then there are some signs of reform. What’s going to happen in 2026? Well, we’ll find out. But there are hopes, their expectations and their fears.
And who better to talk to about all of that than Mohandas Pai. Let’s start this conversation by what we talk about, which is the India Story. That’s what this program is about. How do you think the India story did in 2025 and where do you think we are poised right now?
America’s Economic Crisis and Global Geopolitics
MOHANDAS PAI: Well, I think India has done very well. The world is in a very difficult situation right now because geopolitics is reshaping the world. We have President Trump who is very clear that the United States is the only hegemon in town, the only story in town. And what he says is the way the world has to behave.
And he is facing a crisis in America which people need to understand. What is the crisis? $32 trillion GDP, $38 trillion debt, 1.8 to $2 trillion deficit every year. And they got a trade deficit and they borrow that kind of money. And they keep borrowing $1.82 trillion every year. In four years time, it will possibly go up to 45, 46 trillion dollars.
They’re paying nearly $1.2 trillion of interest. This year it could go to 1.5 trillion on a revenue of 7 trillion. So what do you do? I mean, the whole world has been sponging off America for long dumping.
VIKRAM CHANDRA: Hang on, hang on. I mean, I can never argue with you about the numbers because your number and data is really great.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: But the person who is responsible for most of those trade deficits or the country who is responsible is China. He seems to be really soft on China. Instead, he’s beating up on Europe and beating up on India and beating up on other countries which don’t have as much to do with it as China does. He’s very soft on China. He’s very soft on Russia. He’s very tough with all his friends.
China’s Trade Surplus and Trump’s Strategy
MOHANDAS PAI: Well, there’s over dependence on China. You just saw the data today which said by November, China has a trade surplus of $1 trillion. No country in human civilization had a trade surplus that huge. China has a Trade Surplus of $1 trillion. Surplus.
United States has come down, but China’s proxies in the world, like Vietnam and others, have seen huge surpluses being generated. So China is exporting to America via some other things. And today you see this strange situation. A global superpower, a kind of power which the world has never seen, is facing a very bad economic situation and needs to redeem itself.
So what is President Trump doing? President Trump has to reduce the trade deficit in goods, which I think is 1.3 trillion. They got a huge surplus on services. And the biggest trade deficit is with China. Then it comes Europe, then comes Mexico, then comes Canada, and then a few countries. He has given the list.
So he’s put a tariff on each one of them, depending upon the net deficit that he has with those countries. And he did it just on a formula. He didn’t care. For the first time we have a US President who says, “I don’t care about the world. I have no obligation to the world. I’ve got obligation to myself. I got to reform America.”
The world may not like it, but does America require that kind of medicine? Yes. And economically I think something should happen. I just saw data we said from April to September of this year in the United States, deficit is only about 489 billion. It’s come down compared to the whole deficit this year of nearly 1.8 trillion.
Now, what is he trying to do? He’s putting tariffs on imports into America in the hope to get more revenues that give protection to American industries so that American industry can come up. Remember in the Second World War, the industrial might of America that won the war. Germany could not.
VIKRAM CHANDRA: And a lot of people from Russia who died.
MOHANDAS PAI: No, no, I’ll tell you. 21 million Russians died. 16 million Germans died. The Russians actually defeated the Nazis. But the industrial might of the United States that buttress the Allies to come in. The kind of ships that they built, one ship a day, the kind of tanks and the planes they did. And they fought on two fronts.
India as a Casualty of Geopolitics
VIKRAM CHANDRA: Fundamental question, as I said, this is the India story that I’m doing and…
MOHANDAS PAI: India is a casualty. What is India going to do in all of this? India is a casualty.
VIKRAM CHANDRA: He can’t take on China because China’s got rare earth.
So as a result of that, he’s soft with China, he’s soft with Russia. It’s like I’m fighting with you and I’m too scared of Mohandas Pai. I don’t want to fight with you. I find somebody else in the room and I go and stop that person. That’s what’s happened with India this year.
MOHANDAS PAI: Yes, he’s taken on India because India is a big power. Yes, we all believe “Mera Bharat Mahan,” but economically we don’t matter to the world. We don’t have anything that we can show the world like China does to say, “Hey guys, we are here. You can’t do without us.” We don’t have bargaining power.
So he takes on India to send a message to China, a message to Russia. Look, Putin is getting a lot of revenue selling oil to China and India. Now you can’t take on China. So you take on India and send a message that if you buy oil, I’m going after you. Right. And now India has to reduce and Modi is reducing. He understands what he trusted.
And Modi has played his cards very well. Prime Minister Modi has played his cards very well. I’ll explain that. So he’s gone after India to prove to the world, “You guys go to bed with Russia, I’m going to go after you” because there’s no repercussion for the United States. We can’t do anything to the United States. Let’s be very clear.
So we are not a very strong global power. We’re just $4 trillion. We’re still a poor country. We are growing. In 10 years, it will be very different, but we are growing. But remember, Vikram, the famous photograph in the SCO of Prime Minister Modi, President Putin, President Xi talking and hugging each other.
Then the Wall Street Journal and the Western media ran a full page to say, “Four powerful men in the world: Trump, Prime Minister, President Putin, Prime Minister Modi, and President Xi.” No Europe. Europe is gone. And then Trump realized it is three against one. So he wants to make peace with Prime Minister Modi. He made nice remarks to Prime Minister Modi and India and said, “I’m going to settle it,” etc. So this is all geopolitics.
The Reality of India’s Position
VIKRAM CHANDRA: But once again, you made… You said something really important. And I want to come back to that because that’s actually the crux of what I think the debate and the discussion should be around. You said he picked on India because India is relatively weak.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: That’s what you said.
MOHANDAS PAI: Absolutely.
VIKRAM CHANDRA: And you’re probably 100% correct, because the world that we seem to be seeing is not a world where people are saying nice things to each other or doing nice things to each other.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: It seems to be a world that we’re heading to where might is right.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: But if you’re China, no one’s going to mess with you. If you’re America, no one’s going to mess with you. If you’re Russia, well, you’re not as strong as you are. But, to be fair, you know, you’ll have Trump coming and making nice to you because there’s a perception that you are strong. You’ve got to be strong.
MOHANDAS PAI: You got to be strong.
VIKRAM CHANDRA: You’ve got to build your own capability.
India’s Economic Legacy and the Path Forward
MOHANDAS PAI: You got to be economically strong. Absolutely. That’s what India should do. That’s what Prime Minister Modi is doing. Look, we have a legacy of being economically weak, and we got a legacy of worshiping poverty. Poverty is terrible. Nobody worships poverty. India worships poverty. “It’s great to be poor.” It’s not great to be poor.
Like Deng Xiaoping said, “It’s great to be rich.” We got to be rich, we got to be powerful. We got to have strong industry. We got to have a roaring economy, job creation. What did we do after independence in 1950? This was the greatest economy in Asia. China was destroyed in the war, Japan was destroyed in the war, and then Southeast Asia was destroyed in the war.
We had a war. We had an industry intact and Great Britain owed us $1.5 billion pounds in loans because they took all our industrial goods. Our soldiers, two and a half million Indian soldiers fought. They probably got 10, 15% of what a white soldier got as a salary. Right. And we were strong.
What did Nehru do? Nehru brought in socialism, brought in public sector. Nothing wrong. Suppress private capital. We have been rich throughout history till the British came and looted us because we were a country which was a country of surpluses and traders. We had an open economy. And now he came and suppressed private capital.
JRD Tata could not expand the steel plant and we suppressed. Nothing wrong with public sector. Public sector is important. Why did you suppress private capital? Suppress the Indian capitalist who was investing and were very nationalist. Right. He suppressed his own people and brought in license quota Raj.
What did Gandhiji say? Gandhiji said this: “Desh Meh Sarkar Vyapari Hai. Desh Meh Janta Bikari Hai.” We became beggars. Can you compete against a government which takes your tax money and invests and competes against you? It’s just like the East India Company. When the East India Company was here, what did they do? They taxed us, took the money, bought our goods at a discount and shipped it to the UK and made money. That’s what the public sector used to do those days.
I’ll give you data. 1950 to 1980, we grew 3.5%, population 2.5%, and per capita income grew 1%. That Raj Krishna derives at the Hindu rate of growth. I don’t know why he blamed the Hindus. I don’t understand that. He’s a communal guy and a leftist to boot. But we became poorer in 1980. We are poorer than the rest of the world because the world grew 4.5% that time. There was economic boom in Germany and Asia grew 6.5%.
We opened up in 1980. We grew 5.5% from 1980 to 1991. Population grew at 2.25%. Per capita income 3.25%. And what happened? We had a debt of 20 billion in 1980, went to 80 billion in 1991. We were broke. We had only $5 billion of reserves, 15 days imports and we opened up, took an IMF loan and liberalized.
Then what happened, Vikram? Look at the magic, Vikram. GDP went up from $275 billion in March 1991 to nearly $4 trillion in March 31, 2025. That’s about 8.2% a year in dollar terms for 34 years. GDP went up from…
VIKRAM CHANDRA: That’s a real miracle.
The Miracle of India’s Growth
MOHANDAS PAI: The way India has grown 34 years, 5,32,000 crores to 331 lakh crores, 13% in rupee terms for 34 years.
VIKRAM CHANDRA: And I tell you why that’s important.
MOHANDAS PAI: It’s very important.
VIKRAM CHANDRA: I’ll tell you why that’s important. Particularly important is that if you grow like that for 30 years, you grow at 6% or you’re growing at 7%. When you are a small economy, $300 billion economy or $500 billion economy, it’s easier to do and the impact is not that much.
If you look at the next 10 years, look at the next 15 years, look at the next 20 years. If as a $4 trillion economy you grow at 6% or 7%, the impact, the impact on people’s lives, impact on infrastructure incrementally, the impact on your national power is massive because you’re adding $300 billion a year.
MOHANDAS PAI: There’s so much silly debate in the media about lack of private investment. Let me give you data. We are $4 trillion today. GDP grows because of consumption and investment. We invest 31% of GDP, 92 lakh crores last year. That’s about $1.1 trillion.
There are only three economies which invest more than a trillion dollars every year: China, United States and India. We invest a trillion dollars and then consumption grew by 7.9% last quarter. Consumption is growing. Services I think is really 60% of the GDP.
And we are growing now. We have grown till last year, March 31, 2025, by 11% in nominal terms last three years. If you continue growing at that pace for the next 10 years, which we could possibly, and if you discount the entire growth by 20% at the end of it, we’ll be a $10 trillion economy at 85 rupees to a dollar. The discount factor of 20% on what we are going to be will take care of any rupee-dollar movement, right?
VIKRAM CHANDRA: And that’s in nominal terms. In PPP terms, purchasing power, we’re 18 trillion today. We’re already the third largest.
India’s Investment Boom and Economic Data
MOHANDAS PAI: And people say private sector is not investing. Look at steel, we are investing 160 million tons going to 300 million. Cement, 650 million tonnes going to a billion tons by 2030. We look at two wheelers, 23 million two wheelers, largest in the world. Look at four wheelers, 5.2 million, the third largest in the world. Right?
And look at railways, the fourth largest in the world. Look at roads, second largest in the world. And look at all other industry power. We are the third largest in the world and it’s growing. We are investing hugely. And these people say we are not investing because they’re not looking at data. You should look at national income statistics which capture all the data for investments.
VIKRAM CHANDRA: You’re saying that the data is not accurate. The data is fast, the data is flawed.
MOHANDAS PAI: Say that you know Arvind Subramaniam wrote many times ago after he left India because you know he was a blue eyed boy of Arun Jaitley and he shot on India when he left to say oh, India is not growing. GDP is less because vehicles have not grown. You know, volume of vehicles have not grown. He forgot GDP is about value added.
We are selling more SUVs than selling the old Maruti car for the last many years. And the data is there. If you’re not grown, let him give alternate data. The true test of data is tax to GDP ratio. Tax to GDP ratio has gone up. We are I think close to 12 now from 10. People are paying taxes. Why will people pay taxes? People pay taxes because they’re earning money. And they’re earning money. They’re paying taxes. Even though many people traders may not pay taxes. They’re paying taxes. And that’s the reality. Right.
Growth as the Key to India’s Global Standing
VIKRAM CHANDRA: So I’m coming back to the point that you made. India’s got pushed around a little bit in 2025 because of a perception that relatively India is weak. India will not always be weak. And relatively it’s weak right now. If you can continue to grow at 7 to 8%.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: For the next 10 years or 15 years.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: Nobody is going to be able to do that to you anymore. Because by that size your economic size will be so big.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: You yourself will be a colossal. Would you agree with that?
MOHANDAS PAI: I totally agree with that. But let’s remember one thing.
VIKRAM CHANDRA: So growth is the important key.
MOHANDAS PAI: Growth is the important thing. And you know, we’re not going to be a China. China grew at 9.9, 9.5% for 40 years. The Chinese knew where they’re going to go. You know Vikram, seven, eight years back.
VIKRAM CHANDRA: The Chinese said as big as China for most of human history.
China’s Manufacturing Dominance and India’s Missed Opportunities
MOHANDAS PAI: No, no, beware. But you know, we missed the bus for a long time. And there in the world for two great manufacturing powers. It is China and the rest.
VIKRAM CHANDRA: There is a greater manufacturing power than China.
MOHANDAS PAI: Till the end we were, we were. Then colonization started. The Industrial revolution started. We were looted of $45 trillion by Great Britain during from 1757 to 1947, you know all the history. The Nehru came and added insult to injury by, you know, by getting in bad policies. And his daughter continued that till 91 when we had to open up because we had no option.
Let me explain why. China has 30% of global manufacturing. For US manufacturing, a share of GDP is 15%. May go to 20% by 2030. The world has surplus goods because of China. The Chinese said we’ll invest $150 billion in AI. Seven years ago they invested the second largest power in AI. May be more sophisticated than us in many ways.
And the Chinese said we’re going to invest in EV. Invested 300 billion in 10 years. The largest superpower in EV. Today they have manufactured enough solar cell capacity for three times the world’s consumption. In every area there are unbelievably huge. They did it systematically. We have not been able to do it.
If Prime Minister Modi had not come and become prime minister, we’d have been doomed. Look at the debate with the leader of the opposition today. Katakat, Katakat, Kataka. Where’s the money going to come from? Look at what they’re doing in my state of Karnataka. They’re trying to pass a bill to say that hate crimes and hate speech will be punished. And all you have to do is say, my feelings have been hurt. File a FIR, no proof required. You go to jail. This is crazy. This is totally crazy what these people are doing.
Building Capabilities Across All Sectors
VIKRAM CHANDRA: I’m going to come back to the politics in a couple of minutes. But just to, again, let’s take the theme that you set forward. Right? So you have to grow. You have to grow really fast. You have to build your capabilities. You have to build your military capabilities, your economic capabilities, your social capabilities, everything else.
MOHANDAS PAI: Right.
VIKRAM CHANDRA: You were saying that the policies that Nehru followed. Now it’s become very fashionable to blame Nehru for.
MOHANDAS PAI: It’s not fashionable data. Fine.
VIKRAM CHANDRA: So there’s, okay. There were certain things that Nehru, you also agreed, did correct.
MOHANDAS PAI: Did many good things, many bad things.
VIKRAM CHANDRA: Yeah, some good things. So the policies that actually were probably the ones that held India back was when you don’t trust your own people, when you have licenses and quotas and permissions and say that you are shackling private enterprise, you’re shackling the inherent economic.
The Shackling of Economic Freedom
MOHANDAS PAI: Freedom of the people which was promised to us by The Constitution in 1950 was shackled. The First Amendment was taking away the right to property. Remember, First Amendment was taking over the right to property. First Amendment in 1951 or 52. Yes. They wanted to remove the Zamindaris and all that, they were the challenge, but they could not.
VIKRAM CHANDRA: There’s also a certain historical perspective and you know, the socialism, communism. At that time the world was divided. But I’m just coming back to the.
MOHANDAS PAI: Fact that nobody oppresses their own people in the name of ideology like Nehru did economically. Let’s be, look, we have to be honest at least once today to understand. Nehru did many good things. Yes, totally. Yes. Okay. I don’t say set up one IIT and all. They did many good things because holding the country together was tough at that point of time.
But the good that men do is off in turn with the bones. The evil lives on. The evil lives on. Now look at the problems we have. Kashmir. When did it come up? Because the army was stopped from recovering our territory. Right. Kashmir. And second, the China problem. How did it happen? Because of a patronizing attitude to Mao and Shoven Lay when they said they’re going to do it. Tibet. Right?
We had a consulate in Tibet. We gave it up and we threw them to the wolves. Right? And then we aligned with the Soviet Union, said we’re going to be non aligned. We missed the entire boom after the second World War, the Marshall Plan and everything. Maybe it was good because we were colonized by a company, but doesn’t mean you suppress your own people.
Indians as Natural Entrepreneurs
VIKRAM CHANDRA: So the relevant point, I mean the particularly relevant point which I will take up, which I will agree with you on is that all these policies that held back the basic creative and the economic freedom of the Indian people because Indians are entrepreneurs. They go anywhere in the world. You go to any corner of the world, you are chai kid, your shops are being run by Indians. Local entrepreneurs are Indians anywhere in the world. Indians are inherently entrepreneurial in a situation of economic freedom and liberalizing people.
MOHANDAS PAI: And I’ll give an instance, an example, I’ll give an example for everybody to understand the IT industry. I joined Infosys in 94 when we had $3 million. I saw the rise of a great country, India. From 94 till now. I saw the rise of a great industry, software. I saw the rise of a great company called Infosys.
We now export $235 billion of software. 60% of global outsourcing comes to India. We do extremely sophisticated work for the largest global corporations. And unlike these lefties from JNU who keep abusing us saying you are cyber coolies, idiotic because they have never done anything useful in their life. We have done some great unbelievable work with the largest trained force in AI today. We got 6 million high quality jobs.
And let me give you some data. America has 6 million people in IT. 1 million are Indians. Out of 6 million working in India, 60% work for American companies. Out of 10 million working for American companies globally, 4 million are Indians.
VIKRAM CHANDRA: Last year, out of 1 million, 40% of all the big companies are Indians.
India’s IT Industry Success Story
MOHANDAS PAI: Yes, yes. Globally. And of the 1 million people hired last year in software outside China, 50%, 500,000 were Indians who were hired. Okay. Bangalore has got 2 1/2 million people in software. 67,000 IT companies, 52 unicorns, 20,000 startups, exports 120, $130 billion of services including hundred billion dollars of Software. It’s got 26 lakh cars, one car for nearly every family and it doesn’t have roads.
And let me, let me finish, let me finish, let me finish. Out of the top 10 software service companies by market value globally, five are Indian. Of the top five, three are Indian. Of the 3.2 million employees in the top 10, 2.3 million are Indians. And you go forward, India will have the largest pool of trained software people in the world. More than America by 2030. And we’re going to have that.
We’ve got seven and a half million people working in software. Six million export, one and a half million for the local industry, including startups. Now that is an achievement that happened because of 1991 and economic freedom. Because why we were not constrained by the bad residual policies and the socialistic mindset of the bureaucrats and the politicians.
After we opened up, even after we opened up, they went after you. The FERRA regulation, the FEMA came. The FEMA is being applied to the FERRA mindset. The people sitting in Bombay in that Mint City building still think they’re the only people protecting India from all the marauders who are outside who are taking away India’s foreign exchange. Even including bureaucrats in Delhi and as in Bangalore.
And you, I met the RBI governor and told him, please open up. We need policies today, Vikram, which will take a $4 trillion economy to 10 trillion. We got policies of a 1 trillion dollar economy which has taken us so far. Can we grow to 10 trillion in 10 years with this kind of policies? No, we require liberalization. Manish Sabarwal says the 65,000 regulation we tried, many of which tried to imprison for everything.
Now under the Rajiv Gaba committee, government is trying to remove all that. If you set us free, you allowed us to invest, this investment is happening and it’s happening in a big way. So that’s the point I was about.
The Chains That Still Bind India
VIKRAM CHANDRA: To make that you know, in a sense even after liberalization in 1991, a certain number of things were done. But a lot of the chains that had bound India and have bound Indians are still existing till today 2025. Would you agree with that?
MOHANDAS PAI: I totally agree.
VIKRAM CHANDRA: And that’s not just then Nehru the time. Then even after that there have been Congress governments, NDA governments, BJP governments, UPA governments, United Front governments. We’ve never really bitten the bullet and.
MOHANDAS PAI: Said let’s tear it all up.
VIKRAM CHANDRA: All the things that are holding the Indian economy back. Tear it all up.
MOHANDAS PAI: Yes, we did not. And we did not because we didn’t have a strong leader. Vajpayee tried to do it. Then came Dr. Singh was manipulated by his own party men. And we saw the corruption levels go up at such high levels. We had Prime Minister Modi who has done a great job doing it.
But the key thing is when you bring in reforms, the vested interest fight back. We saw the Farm Bill agitation. I mean we are liberalizing for the farmers. The farmers will have freedom to sell wherever they want. Nobody’s taking away the right to sell. A fake narrative was created to create fear. And who put the money? All these NGOs and others funded by Soros put money. Can you sustain this kind of agitation for one year? Who put the money? I would like to know who put the money.
VIKRAM CHANDRA: But the farm agitation was sometime back now. You yourself have been increasingly impatient in recent years and you’ve been calling the government to say finish the unfulfilled.
The Crisis of Tax Terrorism and High Capital Costs
MOHANDAS PAI: I think it’s happening under the Rajiv Gauba committee. I think I met Rajiv Gauba and I think a lot of things are happening. We have to wait and see. For example, the four labor courts have been notified after five years. They’ve not been notified for five years. They’ve been notified now. And it’s good.
And finally the middle class got the necessary tax break they wanted in the last budget. Right? 1 lakh crore was given to the middle class because taxes were reduced. And the GST is possibly reducing about maybe 2 lakh, 2 and a half lakh crores. Right? And it’s happened. And that purchasing power is coming up. Interest rates are coming down.
You know Vikram, look at this shame. The CPI has got 46% wage for food based on 2011-12. Per capita income was about 70,75,000. Now it’s 2,34,000. Food is not 46% of the wage for anybody. 800 million people, 80 crore people get free food, right? But still have the silly wage. Because they’re not changing now. They’re going to change by February.
And we look at CPI. CPI has gold and silver as a part of it. The gold price goes up because they think gold and silver is consumption. Now we’ve got core inflation. They say core inflation which is 2.5%. And core inflation has got gold and silver. That’s why it looks very high. It’s absurd. We’re using outdated mechanisms.
And the silly thing is Vikram, seven to eight men, wise men sit for two to three days every two months with RBI, the MPC and discuss how to bring inflation under control. They raised interest rate last year and you know, vegetable prices, onion prices, tomato prices, potato prices don’t respond to interest rates. They’re supply issues.
VIKRAM CHANDRA: Some people say that the fact that inflation rates are now down, actually at the time that the…
MOHANDAS PAI: I read an article by you know Sujith Balla. You must interview him. He’s a great guy who’s very honest. He said real interest rates today are 3.5%. You know, overnight money repo rate is 5.25%. We got a great governor in Sanjay Malhotra. He’s bringing in great reforms. He understands it’s for growth, 5.25%.
You know I’ll tell you another thing Vikram, which you understand very well. Look at all $4 trillion plus economies. United States, China, Germany, Japan, India, less than 4 trillion. It is UK and France. All of them have got cost of capital of 3 to 6%. Our cost of capital is 11%. Our cost of equity is 14%.
With such a high cost because of bad policies, are we going to go to 10 trillion in 10 years? Because today out of the large value add that we have, more is going to capital. Capital gets a larger share, not labor. Labor should get a larger share in terms of prosperity. Today capital is getting a larger share because cost of equity is high.
The power companies get 15% post tax or 14% post tax return on equity. Guaranteed. We’re paying through the nose. Interest rate should come down so more investment can happen.
VIKRAM CHANDRA: Interest rates should come down. Now I’m going to put the onus on you.
The India Risk Premium and Tax Disputes
MOHANDAS PAI: And I’ll tell you what are the issues. Interest rate is the mix of G SEC rate for 10 years. It is 6.5%. It should ideally come down to maybe 4.5% because inflation is down and will remain down. And you can have a spread of nearly 1%. Usually 3.5%, 2 and a half percent can come down.
There is 4.5 to 5% India premium. Risk premium. Why is there a risk premium? People demand that kind of risk premium. You know why? Tax terrorism.
30 lakh crores is stuck up in tax disputes. It’s there in the budget. Nobody reads it, nobody argues in Parliament. Out of which 15 lakh crores of taxes are in disputes because the assessee is not available. There are no assets. 15 lakh crores are dispute in courts. 80% done in the last five years.
Jaitley promised in 2014 “I’ll remove tax terrorism.” That time it was 5 lakh 40 thousand crores. Now it’s gone to about 15 lakh crores of tax dispute. What has the FM done? This FM has given more power to the taxman to harass us than any FM I remember.
VIKRAM CHANDRA: You’re such a powerful man.
MOHANDAS PAI: I know. Second, I’ll tell you the second thing which is very important: government policy. No retrospective amendment should come. That’s what I said in Parliament. What did this budget do? They removed the indexation benefits. Retrospective impact. They didn’t even understand it’s retrospective.
So Maruti had a loss of 800 crores in capital. They bring capital gains. That’s fine. When Jaitley brought in capital gains he grandfathered all the schemes and did it prospectively. It was fantastic. Now they brought in indexation and they removed it. Then they brought it back for property because people protested. They didn’t bring it for securities.
How do you trust a government which says retrospectively does what it wants? Last time they did retrospective at the time of the Vodafone case at the Supreme Court. You know, Pranav Mukherjee said that. You know retrospective. Others do. China has done it. UK has done. UK did it for one year. China did it for a particular legal case. They didn’t do it. India did it. And I went on TV and you…
VIKRAM CHANDRA: And I were together in Davos. That damaged India’s reputation for years.
The Court System Crisis and Vodafone Case
MOHANDAS PAI: And people don’t trust you and they demand higher returns. You know, I went on TV and said when they said “what will you give out of ten?” I said only four and a half. Because this Finance Minister Pranab Mukherjee destroyed the faith of Indians in the government. Tomorrow parliament could pass a law saying all your marriages are annulled because you’ve not done some funny registration. They could do anything.
No, the third thing. Look at the court system. Court system is ridiculous. It takes 15, 20 years. When we had our ESOP case in Infosys, we fought up to Supreme Court. Fifteen years after Supreme Court gave the verdict, for three years the tax officer did not apply that. We had to go to Karnataka High Court to get a contempt notice.
I rang up the CBDT member and told him. He said “Mohan, for you I can tell them to do something. I can’t do it for everybody.” Nobody listens to CBDT. That’s the state of affairs. Clean it up and all these things. You can’t have courts taking 15, 20 years for disputes.
Look at Vodafone case. Look at the Vodafone case. You just pass an order. All licenses are illegal. Okay, fine. What do you do with them? What are the consequences? No money is gone. They said lost 1 billion, right? And now Vodafone. Vodafone protested and said the calculation is wrong. For God’s sake get the CAG to look at calculation along with you and certify that the calculation is right or wrong. Look at data man. Don’t get obstinate.
And then what happened? Now suddenly you reverse. Because when Chief Justice retired, you reverse it. Okay. And then that JSW case for the Bhushan Steel. Everybody is happy about Bhushan Steel except the person who took the bank loan and defaulted on the bank loan. He went to court and one justice said, “oh, that whole thing is gone. We must reopen it.” Reopen it after putting 16,000 crores. Give me a break.
We need tax certainty. We need justice in three to five years. A tax case would take 15 to 20 years. We need three to five years. Government must stop appealing against everything. We need a litigation policy for the government. These are the three things that drive up the India risk premium to 4 to 5%. Bring it down to 2 to 3%. US is 1%. Then if you bring down cost of capital to 8 to 9%, so many investments become viable.
The Reform Express: 2026 or Never
VIKRAM CHANDRA: Okay. Now you are the one person whom people will listen to. You understand what you’re talking about. What you’re saying is 100% correct. You are well regarded enough by the government that I’m sure that your voice will go through. And you’ve been saying some of this: don’t do tax terrorism, clean up the regulation, clean up the legal system. You’re saying yes.
Let’s assume you are given a blank sheet of paper right now. 2026 is coming. You’ve got a very strong government. You’ve got a strong Prime Minister. He’s said very clearly “I want to reform.” You are having the parliamentary affairs minister going out and saying that the only agenda of the third term is the Reform Express. If it ever is going to get done, it’s going to get done.
MOHANDAS PAI: Yes.
VIKRAM CHANDRA: And in fact I’m going to make it a very categorical statement that I wonder if you agree with me. Either we are going to reform and fix all of this in 2026 or we are not going to do it.
MOHANDAS PAI: I totally agree with you. Rajiv Gauba committee is a fantastic committee under a great person and I think they will make sure that all the archaic laws are gone and we will not be subject to terrorism by these inspectors. That will reduce it.
Second, tax terrorism has to end. And I have suggested and written papers to say if an officer has raised a demand against you more than 10% higher than the taxes that you have paid, it might be reviewed by somebody. And tomorrow the matter decided in appeal against the officer, there must be a black mark against his CV so that he also will be cautious.
Because today officers can convert a loss into a profit, do what they want. They can do whatever they want and do rent seeking, all kinds of stuff. I’ll give you one data. Last three years government collected 72 lakh crores of direct taxes. How much money was collected in tax raids? Can you believe that? Nobody knows the data.
I went before the parliamentary committee to say 72 lakh crores have been collected. And in this new bill they’re giving more powers to the tax officer to go into social media and get your password and to go against you and open up your files and all that. I said “why are you giving the powers? If you want to give the power, let them go before a designated court, get a court order then do it. Then you can go to the court and appeal, right?”
That is very wrong. They come to your house, they stay in the house for four or five days. They don’t let you get medicine. They do all kinds of stuff and they’re beyond reproach. How can it happen in this country? There’s fear and then what do you do? Many people pay money. They pay money. Lot of money is paid. The money is paid and everybody knows it.
I was part of a committee set up by one of the big tax departments in the committee for reforms. And I had all senior people. They told me “sir, in customs and others we push senior people to all the ports so they can make some money in the last two years of the term.” They’re telling me openly. What do you do?
Look at that customs thing that happened in Chennai, right? It’s been hushed up. Why doesn’t the finance minister tell us what happened? What action was taken? See, we have to reform this.
VIKRAM CHANDRA: She’s going to clean up customs at the next…
The Mohandas Pai Doctrine: A Bold Reform Agenda
MOHANDAS PAI: I know. See, we need to know what happened in that. Have you punished people there? I think I met one of my friends, a senior bureaucrat. He told me, “Mohan, we sacked 500 people from the tax department.” That’s what he told me. And many of them are coming and telling me goodbye. I’m leaving, I’m going. I’ve been sacked.
They’re very happy because once you’re sacked, it seems no action can be taken for your past misdemeanors. I don’t know if it’s true. See, look, we need the tax department to make sure citizen service goes up. In the United States, Infosys says file tax returns in 40 countries.
Vikram, I’m a patriot. I love my country. For me, country is above anybody. Let me be clear. My whole life I worked for my country. That’s important to me. Okay, now I filed in 40 countries. We fought against the IRS and threatened to go to court. We fought against the UK, fought against Australia, fought against Japan.
No country has treated us as shabbily as the Indian tax department. Even for Infosys. No country treated us like this. They pass all kinds of orders, they extort money. In one case, the guy passed an order. I told him it’s very wrong. He said, “It’s wrong. I got targets, I’m doing it. You go in appeal, you’ll win.” They don’t care. There’s no consequence of doing wrong things.
And our finance ministers should protect us. Our finance ministers are our representatives to protect us from usurious tax collectors. Now tax collection has to be tough. That’s the way they’re built. But you must protect. Don’t keep on giving them more and more powers. Protect us.
If the tax department comes to your house, it’s an infringement of your privacy, infringement of Article 19. Tell me, how many of those tax cases have actually resulted in money coming as taxes? How many of them have gone in appeal and how many of them have been turned around?
One political leader, I’ll tell you. I spoke to a chartered accountant who is close to a political leader who was raided. The chartered accountant told him when they said so much money has been found in the books and all that, “We should go public and deny.” He said, “Don’t deny all that. They’ll get upset. Nobody reads that. They’ll forget about it. Let them say what they want. Keep them in good humor.”
Keep them in good humor means settle it with them and go in appeal. See, we have created a rotten system which must be cleaned up. And our Prime Minister and Finance Minister must take the lead to protect honest people. 99% of Indians are honest, good people. Don’t go against them to protect that one person who’s a crook. He’s a crook. And the crook will never obey the law. Whatever law you make, they won’t obey the law. They buy up everybody. They’ll do it.
VIKRAM CHANDRA: And if you don’t clutter up your entire system with going after the 99% who are honest, you will have enough bandwidth to go and catch hold of the crooks and punish them.
MOHANDAS PAI: Tax cuts have gone up by 15, 20% last year. And the last point, why didn’t you go to the Supreme Court and say set up a special bench for commercial disputes? Settle it fast. Time value of money, settle it fast. So that we don’t have commercial disputes. And the government should not go in unnecessary appeals.
VIKRAM CHANDRA: But what you’re saying about the tax department is one thing, but they have tried at least to clean up the tax system to some extent. But what you are describing happens elsewhere.
The Problem of Corruption and Regulatory Overreach
MOHANDAS PAI: 95% of tax people are good, good people. They’re not bad people. They’re good people. 95%. There are 5% who are rogue. Why don’t you go after them? You know them, everybody knows them. You go to the tax department, they’ll tell you who are doing what. Everybody knows it. Tax officers in any city know who does black money. They do it. They’ve got intelligence. They can call the big four, all the consultants and everything.
VIKRAM CHANDRA: There’s such good data you can use AI to figure out who’s a crook and who’s honest. Within five minutes you can probably figure it out.
MOHANDAS PAI: You can do all that. But there has to be punishment for people. In Karnataka, I’ve been telling politicians have become more corrupt. This government is more corrupt than the previous government. For everything there’s a tariff.
I went on TV and said in the government departments where you go for approval that ask for money, put up a tariff card. I said, “This is the money that you have to pay by check. We’ll pay and it will be distributed to so and so people. Put it up.”
I went and told a political leader, “Sir, I understand you need money for elections. You take money. But why do these bureaucrats take money? They’re getting paid a good salary. They’re getting paid a pension. Why should you allow them to become corrupt? Why are they extorting money from us? You want money. I understand. Because elections and all that.”
VIKRAM CHANDRA: Mr. Pai, as we step out of here, the phone is going to ring. It is going to be the Prime Minister on one phone, Mr. Goyal on the second phone, Finance Minister on the third phone. And they’re going to say, “All right, Mr. Mohandas Pai, we hear what you’re saying. Here are the four or five things we can do in 2026.” Give me your wish list. I want to clean up this.
The Five-Point Reform Agenda
MOHANDAS PAI: Remove all the unnecessary regulations, old laws which penalize people. Remove all criminal liability which is going to happen, so there’s only civil liability. Remove the power of the inspector to go after you. And remove the need for renewal of licenses. One year, two years. Make it permanent and trust the citizens. That’s point number one.
That will clean up business. So no need to get approval. No need to do it. Including RBI. RBI also should be made accountable. Because RBI on policy should be autonomous. But where there is citizen service, they must be accountable. If you write a letter and ask for approval, they must give it within 45 days and say why they’re not doing it. Okay, that’s one. That’s a big one.
Second, stop tax terrorism. Penalize the officers who lost cases repeatedly. 70% of cases when we made a study go against the government right up to Supreme Court. You find out who is doing what. And anytime they raise an excessive demand, let it be reviewed by somebody so that there is a maker-checker. And don’t give full powers to them. And follow it up. And don’t keep going under unnecessary appeal.
I think Supreme Court, the appeal level is 5 crores. Make it 100 crores. What does it matter? It doesn’t matter. Government is the biggest litigant. So finish the taxes.
Third, go before the Supreme Court and say commercial disputes, set up a special bench. Because the earlier Chief Justice I think set up a special bench for taxes, commercial bench and look at all old criminal cases all across India which does not involve violence. Section 144, you remember that. Remove all these old cases, criminal cases, more than 20 years where there is no great violence. Withdraw those cases.
Look at all the appeals that are done by the government of India. Go through all of them, which are of no consequence. Withdraw it, close it. Remove all that. Remove the clutter. Increase the number of judges from 20 per million to 150 per million as per the Law Commission. Increase the number. Because justice, the biggest failure of Indian democracy is lack of justice.
And when there’s lack of justice, the poorest of the poor suffer because the rich people hire a lawyer. Senior lawyers get what they want. And that is subversion of justice in my view. But then, please reform justice so that there’s justice for the ordinary man. Everybody feels if somebody oppressed me, I can go to court, I get justice. There is no justice in this country. It’s the biggest failure of the justice system.
And the next thing, what you must do, review foreign exchange regulations. Remove the threat of ED and make sure that unnecessary regulations are gone.
And lastly, review everything the government does. Give us policies to take us to $10 trillion. Don’t give us policy which has brought us $1 trillion to $4 trillion with a lot of effort. Liberate us from unnecessary things in the states. And some other states may not agree because they want to extract money.
You get the BJP states like Uttar Pradesh which has got a great CM. You get states like Babu in Andhra Pradesh. Ask them to sit down and bring in the reforms. That’s fantastic. You do all that. We will do well. We’ll create jobs, we’ll make people much better. Our citizens can stand with pride and young children can realize their dreams.
We are a great country. Give us our freedom back. We get 700 startups coming for capital to my office every month. 700. So many people are becoming entrepreneurs. We need capital. Give them capital. China gives capital. Give them capital. There’s no capital in this country.
We have invested $160 billion in venture in the last 10 years. China put $845 billion. America put $3.24 trillion. How do we compete with China? How do you compete? There’s money in this country.
Confidence in Reform and the Path to Growth
VIKRAM CHANDRA: But I like the first four or five points that you made. Can I call it the Mohandas Pai Doctrine? And if you actually implement all of that, I would be quite willing to bet that India could grow at 7 to 8%.
MOHANDAS PAI: Absolutely. India will grow.
VIKRAM CHANDRA: How confident are you that the steps that you mentioned can be taken? Because I mean, look, let’s face it. You’ve been a strong supporter of the BJP and this government amid a stated desire to have reform. What holds you back from doing any of the steps that you said?
MOHANDAS PAI: I’ve been talking about all the steps. Nothing holds you back except you must have the attention of the Prime Minister. Now the Prime Minister deemed this important. He set up two committees. One under Rajiv Gaba, one under Amit Shah to look at many other issues.
And I think they must isolate the process, do things faster and showcase in the budget. You must do many things. And the Prime Minister, I’m sure will take very bold decisions. I’m very confident that it will happen in 2026. Like you said, I’m very confident it will happen.
If that happens, Vikram, I want young people to become entrepreneurs. I want them to invest. I want them to become stars. We’ve got 250 billionaires in this country. Third largest in the world. We should have a thousand billionaires in this country by 2030. All of them coming from the poorer middle classes, growing the companies, taking capital. They must do it. The power of money is the power to give away.
VIKRAM CHANDRA: So let’s hope all of that gets done. What’s your probability that all of this will get done in 2026? What do you think?
MOHANDAS PAI: About 75, 80%.
VIKRAM CHANDRA: 75 to 80%? That all of this will happen?
MOHANDAS PAI: It’s all been set in motion. All been set in motion. Except tax terrorism. Because the Finance Minister has to really understand. The Finance Minister has to understand she is our representative.
VIKRAM CHANDRA: But the things you think about, tax terrorism also, regulatory terrorism and court terrorism. The principles of accountability apply to others also. Not just for tax. Your policeman on the road does that.
The Tax System and Citizen Rights
MOHANDAS PAI: What you’re saying, the problem is tax. I know the system. My friends are there. They go to the Finance Minister: “If you don’t give me this power, there are a lot of crooks. They’re not paying taxes. We can’t go against them.”
We need the Finance Minister to stand up for citizens and tell them, “I’m not going to do it. You please do your job and clean up.” You know, Jaswant Singh was that man who never set a target for the tax collector. Vijay Kalkar set up the Kalkar committee. Jaswant Singh was a Finance Minister. Great guy, great person. And he said, “I’m not going to set targets.” And you know, tax collection boomed during his time.
I think we need MPs and ministers who are citizen-centric. Like Prime Minister said today, “I don’t want my citizen to suffer. What happened with Indigo, with everything else should never happen in this country again.” That is a great statement. Prime Minister made a statement in parliament. We should respect taxpayers. We never got respect to taxpayers. We treat it like shit.
You go to the income tax office, they make you sit outside. That tax officer disappears. “Come tomorrow, come day after.” They don’t respond to you. I got a big tax problem, you know. I mean, it’s crazy. I don’t talk about it. It’s crazy what the tax officer has done to me. A certificate saying, “Oh, you paid more taxes. Platinum certificate.” Something I said, “I don’t want this certificate, man. You treat me like shit.”
I pay all my taxes, I get refunds more share. You treat me like shit, reopen every year, send me unnecessary notices, all kind of stuff. Go on harassing me. For what? For what? What are you trying to do? And there’s no way to do it.
Please. I think, look, we must respect citizens of this country. They are the owners of this country. It’s their country. We must respect taxpayers, we must treat them well. When I go to a government office, I must be treated with respect. I must be called. Attention should be given to me. That’s the job of the bureaucrat. And the ministers should meet us very often, ask us what is it you want. Talk to us and take feedback. That is real democracy.
Urban Infrastructure Crisis
VIKRAM CHANDRA: Let’s hope all the things that you have said actually get done. Because that will fix the economy. One other thing you’ve been very, very vociferous about in recent times in particular is urban infrastructure.
MOHANDAS PAI: I don’t blame you.
VIKRAM CHANDRA: You live in Bangalore. The streets are unlivable. I mean, you’ve come here, you’re doing this in Delhi. You actually walked into this office wearing a mask. And I understand why. Because you can’t breathe the air in Delhi. The situation in urban India needs to be fixed. That’s something else you’ve become—
MOHANDAS PAI: Let me explain to the audience why it is happening. Seats in parliament are fixed on the basis of the census. Based on the 1971 census for 30 years. So seats were frozen. Population in the south went down, the north went up and all that. And now in 1991, again in 2001, in 2008, they again did the delimitation based on 2001. They didn’t increase the number of seats. They gave something more to urban areas.
From 2001, 2011, they’ve not done it. 2021, they’ve not done it. 2026 or 2027 they’re going. It means what happens? Urban areas will get more seats. So 10 lakh crore of subsidies is being paid to the so-called poor all across. They give it and they all pamper to the farmer, rural lobby and all that. Even though people are not rural, India is 40 to 50% urban or semi-urban right now.
So when the new census comes, more seats will go to urban centers. Bangalore’s population is 1.3 crores. Of Karnataka, 6.7 crores. 20%. We only got 11% seats. If 20% seats go to Bangalore, the political power will be in Bangalore. And the political leaders will respond to us. That’s the biggest thing that will happen. When urban India will get more seats, that means more power should go.
And the political parties who rule this country should understand: they got three years to rectify everything in urban areas. So the urban infrastructure becomes better. The citizens there become much more amiable. And they’ll vote for you because they respond to voters, right? It’s not the rural people are going to have the balance of power. It’s going to be urban India.
And India will urbanize. No country has become rich without urbanization. The world today is 55, 60% urban. India is supposedly 31%, 26% urban, whatever it is. You know, because our definition of urbanization is very, very wrong compared to the global world, right? China is about 60% urban.
What is urbanization? Urbanization is concentration of human activity. Concentration of human activity leads to specialization. Specialization leads to improvement of productivity. That leads to higher income. There is no future in villages. Nobody wants to stay in a village. I read a report: 70% of farmers’ children want to leave.
VIKRAM CHANDRA: If I have to breathe this here, I’d rather live in a village.
The Delhi Air Pollution Problem
MOHANDAS PAI: What is the problem about air? Let me explain to you, okay? I think people should understand that Delhi is a bowl. There’s a three-layer, three-kilometer layer of smog from Peshawar to Dhaka. Summer it goes up, winter it comes down. Then the rainy season, all the particles fall down. It cannot go away, blow away. Because the Himalayas at the back, which are seven to eight kilometers tall, you got a problem.
And what is the source of problem? 1.1 billion tons of coal burnt in thermal power plants from Peshawar to Dhaka in this belt. 1.1 billion. And that is 30% Indian coal with 30% ash, maybe 10% gold. Atmosphere dust from the Sahara and dust from the Thar desert which comes here. Also the local dust in Delhi.
You go to Delhi Street. I came here from the airport. I didn’t come in the main road, came in the back road. It’s dirty. There’s dust on the road. And then our roads have got old specification where the tar surface wears off. When you see the gray dust on the road which is not clean, that is the tar wearing off. Every time you put a new road, the surface wears off.
I just came from Tokyo. I took photographs. Sent it to my friends in Bangalore. Said, “Change the specification.” There is no dust on the roads of Tokyo. There is no dust. Road dust dries up. Come to 25, 30 feet and it comes down. That is the source.
And then old vehicles—remove them. Construction: all buildings in the west and anywhere in the civilized country, there’s an envelope where dust doesn’t come. Construction sites don’t remove dust. You water them. Lorries when they go out, they don’t take dust and make the road dusty. You’ve enforced that. You’re not able to enforce that.
Then vehicles: 17% because largely the older vehicles, trucks, not cars. More than 15 years. If you got a car which are not used for 10 years, don’t ban them. And in Supreme Court, what are the justices saying? “Oh, we must ban these SUVs.” SUVs sold today. We buy maybe luxury cars. 25, 30, 40,000 is not more. 5.2 million vehicles are sold, including trucks. Their latest technology, the least polluting. They are not polluting. The polluting are the old lorries, 15 years, 12 years old, 40s. All these, you know, small, small vehicles.
Therefore remove all of them with the iron fist and bring in public transport. Delhi requires 20,000 electric EV buses. How much do you have? 5,000, 6,000. Kejriwal never invested in that. 75 lakh people move in the metro which is fantastic. And you’re building more metros. Bring in public transport.
VIKRAM CHANDRA: They don’t have last mile from the metro.
MOHANDAS PAI: If you do all that, maybe the pollution can come down by 25, 30%. And then you got to take drastic action about how this coal dust and all come. See, the IIT has released a report. Everywhere is a report. Now we got these funny loony NGOs who say, “Oh, because of crackers during Deepavali it happened.” That’s rubbish, man. Deepavali is one day, doesn’t happen. Yes, there’ll be a spike in some areas.
And then of course the Punjabi farmers are burning. And today we saw a report two days back that the satellite pictures cannot be taken after 3 p.m. They burn after 3 p.m. Somebody must have told them when the satellites pass, they take the photographs. The photograph is from 9 o’clock to 3 p.m. or something. After that it is not there. So you know, you burn after three. They’re still burning now.
There the easy problem. What are the problem? Incentivize them to collect and buy it and give them some money. Don’t make them burn.
Social Media and Political Engagement
VIKRAM CHANDRA: You know, I could go on talking to you for hours. Because you always have a solution for everything. And you are never scared of expressing your views. There are also sometimes I see you getting into lots of arguments and spats with people on social media. On things like Twitter. You’re fighting with people, you get into arguments. Sometimes people call you communal because of the things that you are saying to them. How do you react to all of this? Does it affect your peace of mind or no?
MOHANDAS PAI: Look, many years ago I used to look at comments. Now I don’t look at comments. What I discovered is social media is a platform for me to express myself. I’m very honest. I like to express myself. I believe I’m a free citizen living in a free country. Even though in Karnataka, they’re trying to pass a bill to do all kinds of ridiculous stuff. I’m a free person.
And I got a very simple policy, Vikram. Every government in this country, irrespective of party, is my government. They’ve been legitimately elected by the people of this country. We must respect them. Whatever be your political persuasion, any government. Karnataka Congress is my government. I’ll work with them. I work with all governments for 35 years. When they do good work, I praise them. When they do bad work, I criticize them openly.
And last 15 years I have gone to political parties, given them checks for the election. And I tell everybody, politics requires money. Politics is expensive. You give some money. Show your commitment to democracy. All political parties I’ve given to: the Congress, the BJP and the JDS. My name is there.
One big, big guy from Congress wrote to me and said, “You are a b*. You are this and that.” I wrote back and told him certain things which I don’t want to say. Then I told him, “Look at your party, man. I’m there as one of the largest donors. I give a check every election. I give, we give a check.”
Why do I give a check? I believe in democracy. And democracy is expensive. All of us have to give a check. I spoke to some billionaires in Bangalore and I said, “Why don’t you give a check?” “No, no. Politics is very dirty. They’ll all come.” I said, “If clean money doesn’t come, bad money comes. What will happen to politics? You should give money, give it to all political parties.”
I went to a very big political leader, seasoned political leader. I told him, “Sir, why are you giving your party seats to all these crooks, contractors, corrupt people?” Then he told me, “What man? Do you give me money? You don’t give me money. You abuse me every day in the media. They give me money. I give them a seat. I need money for the party.”
So we have to fund politics. We are not funding politics. And now we have this court judgment. We dissolved the bonds. The court said—what did the court say? “Citizens have a right to know.” Fantastic. Now what happened? You abolish that. Now what happened to citizens knowing anything? They don’t know anything because much of the cash is going. More black money is coming, more crooks are coming.
Electoral Bonds and Political Funding
At least then when the electoral bonds were there, one part of the equation was very correct. Clean money was coming. Debited to a P&L. The people who gave were not known. Why is not known? Because the fear of retribution.
VIKRAM CHANDRA: Yeah.
MOHANDAS PAI: If the names come, political parties will do—we are scared. We don’t get justice in this country. We are scared also.
VIKRAM CHANDRA: It’s the balance. Because one side has more access to information than others do.
MOHANDAS PAI: Look, look. Yeah. Now what you could have done is Supreme Court could have done this. “Okay. We got this system which is good because it is reforming. It’s good for everybody. In the event that you allege that somebody has paid money to get a policy in their favor and you got evidence, all the data about who has given, all the names can be given to the court or given to the election commission. It will not be opened. It will be sealed. And the court may order unsealing for a specific purpose but will not leave the name just for the purpose of the case.”
If something like that was done, would have been saved, you know, justice. We have to do it for the people. Abolish it. Now what is next? Nothing. What is next? You know, one political leader told me, “For this party, for this election, I spent so much money.” Openly he’s telling me. I mean, look, it’s huge money.
Rapid Fire: India’s Future in Quick Takes
VIKRAM CHANDRA: Mohandas Pai, we could continue for hours, as I said, but we are flat out of time now. So I’m going to end this. I think we should do this at least once in a year, because I know there’s lots to say and there’s lots to talk about.
I’m going to end with some rapid fire questions. One word answer from you on each one of these, right? If you had to bet on one city outside Bengaluru becoming a global tech hub, which one would it be?
MOHANDAS PAI: Well, I’ll bet on Pune.
VIKRAM CHANDRA: Will the four day work week ever work in India?
MOHANDAS PAI: No, no, no. We are a poor country. We have to work harder.
VIKRAM CHANDRA: One government policy India absolutely needs to boost innovation in the next three years?
MOHANDAS PAI: Funding.
VIKRAM CHANDRA: India’s next big global strength—AI, biotech or manufacturing?
MOHANDAS PAI: It’s going to be global manufacturing.
VIKRAM CHANDRA: Is India too dependent on foreign VCs?
MOHANDAS PAI: Yes. Yes. India is too dependent on foreign VCs because we are screwed up on policy. We don’t have endowments which can invest, we don’t allow them to invest. Our insurance companies don’t invest because of bad policy. Pension funds don’t invest because of bad policy.
And globally, pension funds, endowments and insurance companies are the largest investor in long term VC investment and we have shut them out for no reason.
VIKRAM CHANDRA: You and I are sitting on a similar podcast one year from now, as 2026 comes to an end. Are we going to be saying this was the biggest year since 1991 in cleaning up the policies that make India a global superpower?
MOHANDAS PAI: The probability is the highest ever for the last 11 years.
VIKRAM CHANDRA: Highest probability now.
MOHANDAS PAI: Highest ever in the last 11 years.
VIKRAM CHANDRA: All right, let’s hope that probability rules that. And if that does happen, are you confident about the India story?
The Unwavering Confidence in India’s Future
MOHANDAS PAI: I’m always confident in the India story. I’ve been confident in the India story ever since I started working in 1994 in Infosys. I saw it happen.
But to me, the pain of the growth should go away. We can do much better without the pain. We take on this pain every day. We take on this unnecessary regulation. We waste a lot of our time. If we had all the time to focus on business, we’ll do much better. That’s the pain.
But India will do well in 10 years irrespective of whoever comes in between, irrespective of bad policy, irrespective. Because the Indian people, the Indian entrepreneur, the Indian youth want India to do well and they will make sure India does well. I have 100% confidence India will do extremely well in the next 10 years.
VIKRAM CHANDRA: With that vote of confidence in the India story and hopes that things can be even better, which is pretty much what I think we have spent on this podcast of the India story all through 2025 with more or less that view that India is going to do well. The India story is great. But yes, it could be even better.
MOHANDAS PAI: It could be better. But now we need to make it even better and make the pain less.
VIKRAM CHANDRA: Make the pain less. Mohandas Pai, such a pleasure.
MOHANDAS PAI: Thank you very much. Thank you. Watch me on The India Story talking to Vikram Chandra. We had a great conversation. I’m sure you’ll enjoy it.
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