Mohandas Pai, Chairman of Aarin Capital and former CFO of Infosys, has raised critical concerns about wage disparity in corporate India.
Drawing from his experience at Infosys, Pai highlighted that freshers earned ₹3.25 lakh annually in 2011. Thirteen years later, their salaries have only risen to ₹3.50-3.75 lakh—a meager 15% increase.
“How is this justified?” Pai questioned. “What was the CEO’s pay in 2011, and what is it now? It has to be fair.”
Pai’s concerns align with a study cited by Chief Economic Advisor V. Anantha Nageswaran, which found that while corporate profits hit a 15-year high in March, employee wages have lagged behind.
Pai noted that automation has reduced the percentage of wages to value-added, and companies aren’t compensating employees adequately despite growing profits.
Highlighting the disparity, Pai explained that top executives’ salaries have surged.
“IT CEOs’ pay has increased by 50-60% over the past five years, while board compensation has risen by 20-40%. But for the bottom 20%, wages have only gone up by 20-25%,” he said.
Contract employees face an even grimmer reality.
A Quest study revealed that their wages have risen by just 1-2% in the past five years. These workers, often in roles like janitors and electricians, are tied to stagnant minimum wages, which Pai described as “a great degree of exploitation.”
Pai called for systemic reforms, urging that CEOs’ salaries be linked to performance and that minimum wages in the service sector be raised.
“Costs have gone up, and wages haven’t kept pace. People are in pain,” he said, emphasizing the need for fairness.
While automation has boosted productivity in manufacturing, it has also reduced labor requirements.
Pai urged businesses to focus on equitable practices, particularly in services and distribution sectors, where profits remain high.
“Employers are making profits but are not being fair to the people,” he asserted, calling for urgent action to bridge the gap.
