Mohandas Pai, Chairman of Aarin Capital and former CFO of Infosys, has raised a hard-hitting question about wage disparity in India Inc.
Drawing from his tenure at Infosys, Pai pointed out that freshers earned Rs 3,25,000 annually in 2011. Today, 13 years later, they earn between Rs 3,50,000 and Rs 3,75,000—an increase of merely 15%. “How is it justified?” Pai asked. “What was the CEO paid in 2011? What is the CEO paid now? It has to be fair.”
Pai’s remarks echo the findings of a study cited by Chief Economic Advisor V. Anantha Nageswaran, which revealed that while company profits hit a 15-year high in March, employee wages haven’t kept pace.
“The percentage of wages to value-added has come down because of automation, and they are not paying more,” Pai was quoted as saying in an interview to the Economic Times.
Highlighting the stark contrast, Pai explained that salaries at the top have risen sharply. “Look at an IT CEO’s salary five years ago, and look at it now—it has gone up 50-60%. Board compensation has increased by 20%, 30%, even 40%. But for the bottom 20%, wages have only risen by 20-25%.”
The disparity is even worse for contract employees. A Quest study shows that their wages have increased by just 1-2% over the past five years. These workers, often in roles like janitors, shop assistants, and electricians, earn salaries tied to stagnant minimum wages. “There is a great degree of exploitation of the bottom 50%, and India Inc has to really pay them better,” Pai asserted.
Pai didn’t mince words about the systemic issues. “CEOs’ salaries have gone up multiple fold,” he said, while urging that their pay be linked to performance. He also advocated raising minimum wages across the board in the service sector. “People are in pain because costs have gone up, and wages haven’t kept up,” he said in the report.
While automation in manufacturing has increased productivity, it has reduced the need for labor in some areas. Pai urged businesses to focus on fairness, particularly in services and distribution, where profits remain robust. “Employers are making profits. They are not being fair to the people,” Pai said, calling for urgent reforms to bridge the gap.
