'People are scared to do business here': Mohandas Pai on how India grew despite systemic failures

India’s oppressive economic policies, bureaucratic overreach, and broken dispute resolution systems are stifling entrepreneurship, says Mohandas Pai, former Infosys CFO, in a wide-ranging conversation on the Bharatvaarta podcast.

“People are not risk takers because the system doesn’t allow them to be,” Pai said. “You’ve got to feed your belly first.” He argued that the average Indian is pushed toward salaried jobs due to lack of capital access and a hostile policy climate.

Drawing from Infosys’s early struggles, Pai recalled, “Infosys never got capital till it went IPO. They slogged for 10–12 years and only grew from $0 to $3 million. Can you believe it?”

Pai blasted regulatory bodies, particularly the Reserve Bank of India (RBI), for what he called a “controlling, anti-business attitude.” “They issue a law and then issue a regulation to clamp it down. You write to the RBI — they don’t reply. One year later, they wake up and send you a notice.”

He also questioned RBI’s strict foreign investment rules. “If I sell my company to a foreign investor, I need to give a valuation report. What is this stupid valuation report? The price is what a buyer and seller agree on.”

Pai accused regulators of treating entrepreneurs with suspicion. “The people in the RBI Mint building think they’re saving this country from marauders — that includes all of us.”

His sharpest critique was reserved for India’s taxation system. “We were promised an end to tax terrorism. Instead, tax disputes have ballooned from ₹5.4 lakh crore in 2014 to ₹12.5 lakh crore today. Another table shows ₹15 lakh crore — and these are fake demands.”

He pointed to the judicial bottleneck as a major drag. “You appeal — the commissioner won’t go against his colleague. Tribunal: 3–4 years. High Court: 3–8 years. Supreme Court: another 5. It takes 20 years to get justice. We’ve grown without justice.”

“People are scared to do business in this country,” he said.