Murthy said he had not seen any country that has solved the problem of its poverty without encouraging entrepreneurs. “They (entrepreneurs) convert an idea into jobs for people, into wealth for themselves and their investors, and into taxes for the country. Therefore, it is desirable that all public governance systems completely remove any hassle for entrepreneurs so that they can accelerate creation of jobs and wealth, and payment of taxes to the government. That is the ideal thing for a developing country,” he said.
Gopalakrishnan said the new regime in Delhi must push for more public and private spending on research. “We need to make things easier for startups,” he said, adding, “Ease of business and ease of life for ordinary people should be among the top priorities of the new government.”
Both spoke to ET exclusively on Wednesday on a range of topics.
Murthy urged the upcoming government to “fully embrace compassionate capitalism” and provide free play for entrepreneurs “as neither socialist nor communist systems led to a satisfactory outcome in the past”.
Those who violate the law of the land should be punished heavily, he added. “You have to allow 99% of people who are honest and law-abiding to move fast and create lots of jobs and pay taxes. That will be good for our country, children and grandchildren,” Murthy said.
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Angel TaxGopalakrishnan said the new government must also work to resolve the issues surrounding angel tax on startup investments and make things easier for startups.
“We have been talking about it (angel tax) for many years. And I still get income-tax notices asking me at what valuation I invested. So, these things must be looked at,” he said. “As Murthy said, we make the rules for the 5% of people who cheat the system, or who game the system.”
Murthy added, “In any country, that 5% will always be there.”
Gopalakrishnan, as president of Infosys Science Foundation, and Murthy, as its trustee, called for policies that encourage private companies to make donations by way of equity shares to top research institutions.
“A push from the government will help. They will be a lot more confident about doing this,” Gopalakrishnan said, referring to institutions.
Many institutions don’t have investment committees or a mechanism to accept shares as donation, he said. “It is an area where the government’s support will make it easier and clearer. Right now, individuals and boards are taking the initiative.”
Murthy added: “As long as there is a very clear process for accepting, holding and managing equities donated by any well-wisher, why not?”
Murthy said he did attempt to donate Infosys shares to IIT, Kanpur, and his wife Sudha Murty to IISc around 1995, but regulations back then allowed only cash donations. “Infosys shares have grown more than 768 times since then,” he said.
Gopalakrishnan said regulations had undergone many changes after that.
Economy improving
Murthy said he felt disposable income with people is going up. In the middle-class area of Bengaluru where he lives, he noticed many new stores including inexpensive food outlets coming up in recent years.
“I see a lot of people selling fruits and vegetables at street corners. What this means is the disposable income of the middle class and lower middle classes has increased,” he said. “And I am speaking from a middle class and lower middle-class locality where I live. So, I do believe that the economy is improving. I do believe that there is greater disposable income in the hands of the middle class and lower middle class. These are all very good surrogate indicators. That’s my view.”
