Earlier this year, Karan Thapar, one of India’s more acerbic interviewers, interviewed N. R. Narayana Murthy on a range of big issues for CNN-IBN. Please click on the link above to hear the first portion of that interview.
These are the salient points Murthy makes.
# The responsibility of government is to ensure people are happy and prosperous. To make them prosperous, you need economic growth. To achieve economic growth, you need to encourage entrepreneurship. That means creation of more and more jobs.
It’s not the responsibility of government to create jobs. Its responsibility is to create and environment where there are greater and greater incentives for more and more entrepreneurship to create a larger and larger number of jobs.
# Capitalism is about providing equal opportunities for people, giving them the incentive to perform and creating the competitive conditions.
All countries which embraced communism have failed. Even Cuba. When Fidel Castro fell ill, the only person he could trust was his brother!
I believe in compassionate capitalism where there is capitalism in the mind, socialism in the heart, and corporations which make profits will have to live in harmony with the society around them.
# True socialism is what previls in Sweden and Norway. We followed pseudo-socialism in the 1950s and 60s.
# We have the largest mass of unemployed people. We have the largest mass of illiterates and semi-literates. Agriculture isn’t growing fast enough. We have to shift them from agriculture to low-tech like China has done (140 million jobs in 11 years).
We can’t have a situation where 65 per cent of the people account for only 26 per cent of the GDP.
# All over the word, it has been demonstrated that only when you have the right to retrench will you become bold enough to create more and more jobs.
We must be bold enough to bring labour reforms and at the same time have a good safety net so that even if people are retrenched they don’t have to worry for 3-4 months.
# We must privatise public sector units. Government should not be in business. The navaratnas should perform even better as if they are private sector units.
Infrastructure—airports, roads, ports, power—should be built by private sector. Government should create the policies that encourage the private sector and if necessary act as the regulator.
Even in education and health care, I do believe in urban areas the government should leave it to the private sector. Government should provide subsidies by way of vouchers as Milton Friedman suggested.
# The retail sector should be opened up. If the existing mom-and-pop shops are suffering due to the entry of large Indian groups, then we can go the whole hog and allow large MNCs. They will bring in the best technology, the practices. The consumer benefits in the end.
# There are sections of our society which need subsidies. But we do not have the accountability. We need to work on a model which enhances accountability so that the government brings its good intentions, and the private sector brings its efficiency and technology.