Why Infosys founder Narayana Murthy endorses higher taxes for capitalism evangelists

Infosys founder Narayana Murthy in a fireside chat with Zerodha co-founder Nikhil Kamath at Bengaluru Tech Summit

In a country like India, where there is a large mass of poor people, the evangelists of capitalism must accept the fact that they need to pay a higher level of taxation because the government needs to provide many public services to the poor, Infosys founder Narayana Murthy said during a fireside chat with Zerodha co-founder Nikhil Kamath at Bengaluru Tech Summit on November 29.

"We have to realize that India is a poor country. A per capita GDP (gross domestic product) of $2,300 puts us at about twice the per capita GDP of what is called low-income countries by the United Nations and other bodies. We are still far away from being called a middle-income country, where the per capita GDP is somewhere between $6,000 to about $12,000-$15,000" he said.

Elaborating on this matter, Murthy said "The other day, the prime minister said that his government will provide free ration to 800 million people for the next five years. So this means that we have at least 800 million people who do not have the capacity to earn two meals a day"

Therefore, to create an "efficient, corruption-free and effective" public goods in our country, the taxation will have to be higher than what people see in developed countries, he said.

"I personally would not at all (hold a) grudge if I have to pay a higher level of taxation. It's only people like Priyank (Kharge, the state IT minister), who will have to say how can we provide the best services for the poor people" Murthy said.

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That said, he cautioned that nothing should be given for free. When the government provides these services and subsidies to citizens, there should also be a contribution of the citizens towards making our society a better one, he said.

For example, Murthy suggested that if the government plans to provide free electricity to citizens, it should also state that this benefit would only be made available if the percentage attendance in schools go up by 20 percent.

"Therefore, while I am not against free services being provided ... I think we should expect something in return from those people who receive those free subsidies to take a slightly bigger responsibility towards making their own future generation including their own children and grandchildren better in terms of going to school etc" he said

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During his fireside chat, the Infosys founder also mentioned that the people in the infrastructure industry must work three shifts to improve the city's infrastructure with a sense of alacrity. "For example, completing the Electronic City Metro and expanding to other areas where there are a lot of companies, have to be taken up on a priority" he said.

He added that in the nations that have high aspirations, people have worked atleast two shifts.

"If we did that, I have no doubt on why India cannot grow even faster than China, not just the growth alone ... we will catch up with China and hopefully one day we can overtake. But that requires taking quick decisions, making sure that all hurdles for entrepreneurs are removed as if there is no tomorrow" Murthy said.