India is in a very good position right now, global geopolitics is in our favour: Nandan Nilekani

Between 2008, when Imagining India was published, and now, how do you see India changing?

I think in some areas, we have done more than what I thought would happen, certainly in the area of digital technology and transformation. In some areas, like urban reforms, a lot of reforms have happened, but more could happen. So I think it's a little of everything. But my fundamental thesis that India is going to have a demographic dividend, that India will be the only young country in an aging world, that China will start aging in 2015-16 is coming true.  I think India is in a very, very good position right now.

If you have to reimagine India 25 years from now, what would be the two-three things that you believe can be the game-changers?

First of all, because of the demographic dividend, you will have more working age people than either old people or young people. And once you have that, automatically, it will lead to economic growth, provided you create enough jobs for them. So, we have to execute on that. But if we can create enough jobs for them, then we'll have many, many years and even decades of economic growth, which will then lead to better lifestyles, reduction of poverty, people becoming wealthier, and so on. So, I think there's a whole economic growth story.

But this time, we will do it in a very equitable manner. Because this is not a resource-based growth we're going to have, it's not about selling our oil, or coal or whatever is going to come because people, human beings, will get educated, get jobs and earn money, and it will happen at the population scale. So, it'll be equitable growth for everybody. That's what I believe will happen. I also believe that India will go from being informal to formal in the next 25 years. So, more and more people and companies become part of this system. And once they become part of the system, they will have access to facilities, they will pay taxes. The whole structural nature of the Indian society will become much more formal, which will also make it much more stable.

Are you optimistic about India today and its future, taking into account the economic, social, political changes in the last decade?

Obviously, we live in an era where there's also very high visibility of these kinds of things. And social media has not helped because it creates a lot of divisiveness, and so on. But I think those are issues that we'll have to deal with. But the fundamental thing is that you are looking at a decade or two of economic growth, which is equitable, you're going to pull out many, many more people from poverty. And so I think it's good and the global geopolitics is in our favour. I think it's a great place to be and we just have to execute well, and make sure that we actually meet the aspirations of all the people.

In 2016, you had said, "Manufacturing will happen, but it will not be the driver as it was for Korea, China and Japan." What's your stand on it now, especially after the supply chain issues faced during the pandemic, and the geo-political issues around China and the US? Do you think India still has a strong case for manufacturing - if not for jobs - for other reasons such as security and building local capabilities?

I think India is well poised to actually become a much bigger player in manufacturing. Covid and geopolitics have made people think of China plus one strategy. So, they're looking at other alternatives in the supply chain. India happens to be a huge market. I think the PLI scheme is very well designed, infrastructure is improving dramatically, with roads, ports, airports, and so on. So yes, I think manufacturing will improve a lot.

But we can't think of only manufacturing as the engine of job creation, which is what happened in these countries - Japan, South Korea, China. They used manufacturing as the main engine. We have the advantage of a dual engine. And we have a dramatic increase in services, especially IT services and other services that we can export digitally across on the wire. Therefore, I think this combination of service-led expansion of global markets and job creation, coupled with manufacturing, actually creates a very powerful capability for driving economic growth.

How do you see the current fears of a US recession impacting the IT industry, which witnessed the best spending environment since the Y2K in the last two years? This quarter has been a mixed bag, some analysts say decision making cycles are getting longer.

It is a B2B business. And, if your customers are slowing down, then that's logical. Having said that, I think within that there are many opportunities for market share increase. The companies that are much better organised, much more competitive, much more customer-focused, will have much more relevant services to offer, they will do well.

Though there could be potentially a slowdown across the industry, not specific companies, the secular trend of digital acceleration is not going away. Because what happened was, even before the pandemic, companies were migrating to the new technologies and pandemic just accelerated that. And you will find that India will play a huge role in that.

August 2022 marks exactly five years since you returned to Infosys after staying away for a decade. One of the first statements you made then was that you wanted to make Infosys a boring company again. Have you succeeded in that mission?

Oh, absolutely. I think we are off the front pages from a sensational point of view, we are on the front page for the right reasons. Because it is the fastest growing company in the sector in the world. And that's a good reason to be on the front page, because we have great leadership with Salil (Salil Parekh, Infosys CEO) leading the team and the transformation. So if we are in the news, it's by and large for the right reasons.

Do you think it's already become the bellwether of the industry? 

Bellwether is a decision that others have to make. But in terms of demonstrating the transition to digital, getting high growth rates, employee value proposition, capital market policies, we were very good. Last year, we returned $3.1 billion of capital to our shareholders, you had $3 billion of free cash flow. You know, when I came, it was $2 billion. All this has put Infosys in a good place.

Will you stay on for the next five years?

I've said I will stay as long as I need to.

But you're needed for the next five years. 

Let's see how it goes. I'm not going anywhere.

 I remember you were a very reluctant returnee. But now you seem to have hit your stride. 

Obviously, when I came back, it was a slightly complicated situation. But I think we got past that. We have put things back on stage, we are a very stable company now, have a very stable CEO, a very unified board, which is supportive of the management and is very client focused. So, I think we've got everything in place. I think we should continue this model.

Does it help to have a founder or a promoter at the board level with skin in the game? 

I think the founder being there has a couple of advantages. One is what you can call as founder clout. So if you have to take the company in a particular direction, the founder has the clout to pull it off. Because he has that credibility. And I think I was able to use some of that founder clout to get some things done. The second thing is that it brings stability and a long term-ish nature to this because, I always think about, what's the legacy I will leave behind and how do I make sure that this company will continue to prosper when I'm not there and so on. So there's a long term-ish approach to a company which its founders have.

Now it doesn't mean that non-founders don't have that. Because there are many successful companies in the world that are run without founders, and they've been around for hundreds of years. But I think it's very important therefore, when founders transition that the board may not have founders, but it needs people who think like founders, people who think long term.

Personal data protection bill is being reworked. What it should look like. What about the core elements? 

You always have to find a balance between regulation and innovation, you have to strike a balance between protecting the privacy for the individual, and also allowing competition. So, there are many of these balances that have to be struck, you have to find a balance between bureaucracy and lightweight regulation. It's all about judgments and balance. And I think we have a very good IT minister, Ashwini Vishnaw, and he will get it right.

Aadhaar used to face a lot of criticism. Has it come down in your view?

I think so. Because you have to understand that a lot of the noise was just before the Supreme Court decision. But once the case was done, and it stabilised, and the state of Aadhaar report, which was brought out, showed that 92 percent of the people want Aadhaar. Then what is left, it is part of the culture. When I see a TV show, there is an Aadhaar card, in some movies, there's an Aadhaar card. So, when it's part of culture, then it's a done deal. So now it's yesterday's battle.

Some 20 or 30 years ago, there were people protesting against Kentucky Fried Chicken. Today, there's a KFC or a McDonald in every nook and corner. So societies move on.

The other two programs that you are active in are Account Aggregator and ONDC. Both are significant game-changers in lending and e-commerce. UPI got a big boost with the zero MDR policy. Are there any government schemes or incentives to give a similar boost to ONDC?

ONDC has natural demand. I am very pleasantly surprised by the demand for ONDC. It's an idea whose time has come. Everybody wants to be part of it. Small retailers are delighted that there's going to be a way for them to participate in the global digital ecommerce world. It is going to give a big boost to hyper local commerce, quick commerce. Suppliers are delighted because they can list the products on ONDC and any consumer app can order it. Delivery companies are very happy because they will get a higher number of delivery packages, So everybody wins. I think just market momentum will drive this. Like everything else built in India, it is going to be a high volume, low cost, low transaction fee kind of model. So it will be quite attractive to all the players.

All PSUs banks are in the AA (account aggregator) ecosystem. How do you see the growth trajectory now?

The credit for that has to go to the government. The finance minister, the prime minister, everybody have been very, very supportive. We have 1.1 billion accounts now on account aggregator. Now we need to increase the volume of requests or consent, people asking for data, that will build. Account aggregator will democratise credit, among other things, but the biggest thing is that millions of small businesses will get access to credit.

So, you have to see what happens together. ONDC gave the infrastructure to unbundle the supply chain. Credit through account aggregator allows everyone on the supply chain to get formal access. So they no longer depend on the other guy on the supply chain to give them credit. Both of these together are going to unbundle the whole supply chain of India and create a brand new, far more efficient supply chain. It is lending plus unbundling of commerce.

With respect to startups and valuations, 2021 was a heady year but now everyone is talking about a funding winter. What would your advice to founders be in the current environment?

When you look at the great companies born out of the Internet, the last 20 years, you know, it's Google, Facebook, and Amazon. And of course, Apple took advantage of the mobile internet. And then in China, you had Alipay, WeChat, Baidu, all these are hugely profitable companies.

So you have to reach a point where you get unit economics right, where you get contributions right, where you start making money, making money is the best defence against any of this. Now, people say, we have to grow very fast. So we'll make losses till we grow that. There's some argument there. But that doesn't mean that you don't focus on getting the unit economics right, very early in the game. It's also about using your capital, very sparingly, and very thoughtfully.

Infosys, the company you co-founded, is now 41 years old.

40 years, $16 billion in revenue, $3 billion in cash flow, $80 billion market cap. Thanks to the original leadership of Mr Narayana Murthy and all the other founders, now we have a new team of leaders.

Do all the co-founders of Infosys meet up? When you meet up, what do you discuss?

We just hosted a dinner at home a few months ago just as the pandemic was wrapping up, and they all came home and had a great time. We didn't talk about Infosys. We talked about random stuff.

What are your productivity hacks? 

I don't have negativity. So it's very important. I'm not sitting and feeling jealous about somebody or wanting to take revenge on somebody, none of those emotions. I'm just relentlessly focused on adding value every day.

What does freedom mean to you?

Freedom is the ability to get more impact. The freedom I have because we live in a free country or the freedom I have because I have money allows me to do even more to make a difference.