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Last Updated: Tuesday, 1 June, 2004, 11:07 GMT 12:07 UK
'Compassionate capitalism' urged for India
Indian entrepreneur Narayan Murthy, founder of global software giant Infosys, says "compassionate capitalism" is the only solution to poverty in the country.

Narayan Murthy
Narayan Murthy: One of the world's most admired business leaders
Debate is currently raging throughout India over the economic policy of the new government, following a lukewarm media response and stock market jitters.

But Mr Murthy told BBC World Service's The Interview programme that more had to be done to drive entrepreneurial activity.

"We believe that if India has to solve its problem of poverty, we have to embrace capitalism, ensure that jobs are created, and make sure that market-driven policies are accepted," he said.

"However, to do that, the people who are the evangelists of capitalism, must conduct themselves in a manner that will appeal to the masses.

"People must be able to relate to them easily. They must lead a normal life, a simple life, and people must be able to say, 'look, if these jokers can do it, we can do it better'."

Mr Murthy is one of the world's most admired business leaders, who gives much of his company's wealth to charity.

Hard-nosed approach

A growth rate of 7%-8% a year has been targeted by India's Finance Minister Palaniappan Chidambaram.

Mr Murthy said the only way to do this was to encourage a new set of entrepreneurs.

"I believe that is the only hope we have. We have tried socialism and it has not worked. We tried Communism, it didn't work," he said.

I wanted to come back to India and conduct an experiment in creating wealth legally and ethically, and creating jobs, because I thought that was the best way of eliminating poverty
Narayan Murthy, Infosys
"I think this is the only hope we have."

But he warned this would not happen if the approach was too hard-nosed.

He urged "compassionate" capitalism, with an ethical and genuine appeal.

Mr Murthy pays himself less than $50,000 a year, and said his company stresses ethical use of profits, 96% of which come from business outside of India.

He recalled that when India had bordered the old Soviet Union it had been very difficult to establish his company in 1981.

He told of the time when he had travelled to Bulgaria in the 1970s and encountered the Communist system.

It "convinced me very clearly , definitively and once and for all, that that's not the system that I would enjoy being part of", he said.

"I wanted to come back to India and conduct an experiment in creating wealth legally and ethically, and creating jobs, because I thought that was the best way of eliminating poverty. That's how Infosys was born."

Hi-tech game

Infosys develops customised software operations. It was quoted on the Nasdaq exchange in 1999.

Infosys workers
Infosys develops software systems for a number of global giants
Mr Murthy said that when he set up the company, it took seven days of approval to travel outside India, and he waited a year to obtain a telephone for his office.

But he said the economic reforms of 1991 had "changed the equation in our favour."

Most importantly, they allowed foreign companies 100% equity in hi-tech companies in India.

"That meant these great multinationals came to India - IBM, Digital, Texas Instruments, Microsoft," he said.

"Once they came to India, we learned a lot of good things from them - human resources policies, the importance of physical infrastructure, technology, a market-driven approach.

"We played the game their way, and we have not looked back since then."

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