Mohandas Pai, chairman of Aarin Capital and former CFO of Infosys, has raised a serious question about pay disparity in India Inc.
Citing his tenure at Infosys, Pai pointed out that in 2011 freshers earned Rs 3,25,000 annually. Today, after 13 years, they earn between Rs 3,50,000 and Rs 3,75,000 – a mere 15% increase. “How is that justified?” Pai asked. “What was the CEO paid in 2011? How much is the CEO paid now? It should be fair.”
Pai's comments are echoed by Chief Economic Adviser V. The findings of a study cited by Anantha Nageswaran reveal that while company profits hit a 15-year high in March, employee wages are not keeping pace.
“Because of automation, the percentage of wages for value addition has gone down and they are not paying more,” Pai was quoted as saying in an interview with the Economic Times.
Highlighting the opposite, Pai explained that wages at the highest levels have risen sharply. “Look at the salary of an IT CEO five years ago, look at it now – it has gone up to 50-60%. Board compensation has increased by 20%, 30%, even 40%. But wages for the bottom 20% have only increased by 20-25%.
The disparity for contract workers is even worse. A Quest study shows that their wages have only increased by 1-2% over the past five years. These workers, often in roles such as janitors, shop assistants and electricians, earn wages tied to the stagnant minimum wage. “There is a lot of exploitation in the bottom 50%, and India Inc. should really pay them better,” Pai stated.
Pai did not worry about systemic issues. “Salaries of CEOs have increased manifold,” he said, calling for their pay to be linked to performance. He also proposed raising the minimum wages through the Services Sector Board. “People are suffering because expenses have gone up and they are not getting paid,” he said in the report.
Automation in manufacturing has increased productivity and reduced the need for labor in some areas. Pai urged businesses to focus on equity, particularly in services and distribution, where profits remain strong. “Employers profit. They are not doing justice to the people,” Pai said, calling for urgent reforms to bridge the gap.