'We couldn’t build a jet engine in 20 years': Mohandas Pai says China surged ahead while India fed PSUs

India is the only country where taxpayers are forced to fund government-run businesses that compete directly against them, says Mohandas Pai. The former Infosys CFO slammed this as a deep structural flaw in India’s economic policy during a recent podcast with Bharatvaarta.

“This is the only country where the government takes taxpayers’ money and gives it to public sector units to compete with taxpayers. Can you believe it?” Pai asked, contrasting India’s model with that of the U.S.

Sharing his experience at NASA, Pai recalled being told, “We will not use taxpayers’ money to compete with taxpayers—we use it to fund high-risk, blue-sky technologies.” In India, he said, such funding is minimal. “Innovation spending? Peanuts,” Pai added, pointing out that most of it goes to DRDO and public labs like NAL, which he criticised for underperformance.

“We couldn’t build a jet engine in 20 years. China is competing with Boeing. Why didn’t we give that money to Tata Motors or L&T? They would’ve built it,” he argued.

Pai made clear he isn’t anti-PSU. “I want the public sector to do well. But don’t feed only them because you’re safe. This country belongs to all of us—including private enterprise.”

He also pointed to flawed incentives: “State Bank of India’s chairman manages ₹30,000 crore but earns ₹45 lakh a year. A junior software engineer in Bengaluru makes that in five years.”

The root issue, according to Pai, is fear of accountability and a culture of political safety that props up inefficient institutions. “Technology belongs to all of us. Release it to the industry. Let everyone build,” he said.