Cochin Chamber's India Forward Talk Series with N R Narayana Murthy

Kerala, whether it is the northern part or the southern part, one thing excites me, and that is if the rest of India can indeed follow the level of public cleanliness, then our country would progress a lot. Because one principle I learned very early in my life is unless you keep your public space clean, your offices clean, your schools clean, there's really no possibility of your exhibiting excellence in what you do. I only hope we'll learn from your state and become better before we can aspire to a better level of prosperity.

Well, distinguished members of the Cochin Chamber, friends from the government, industry, and various professions, thank you very much for this warm, kind, and generous welcome. Kochi, that is, carries history in its bones. Long before the word globalization existed, this harbor was already the world's crossroads. A place where Arab traders, Portuguese admirals, Chinese merchants, and Jewish spice dealers struck deals on the same waterfront.

When this chamber was founded in 1857, the industrial world was being remade with steam and steel. Today, in 2026, we face a reshaping no less radical. Only this time it is driven by silicon, software, and the restless ambition of a billion Indians.

The question I want to wrestle with this evening is deceptively simple. That is, how do we make India not merely growing, not merely emerging? I'm sick and tired of hearing this 'emerging country' for the last 60 years. Ever since I was 20 years, 21, 22, when I went to France to work there. But structurally and irreversibly prosperous. That is our target. That is our ambition. That is our aspiration.

Singapore did it right in front of our eyes. South Korea did it. As you all know, India and South Korea had the same per capita GDP in 1952. Today, their per capita GDP is probably about 8 to 10 times that of India. Singapore was like Chennai when I first visited in 1967. But today, Singapore has surpassed the United States in per capita GDP with somewhere around US dollars 92,000 plus in its per capita GDP.

So we have examples right in front of our eyes, right in our lives, that tells us that it is possible for India too to dream that. Similarly, China did it. China demonstrated that last year it exported $3.6 trillion US. $3.6 trillion US. And you know what US did at the same year? $2 trillion. In other words, China's exports were approximately twice that of the US. About 1.8 times.

China created another record, and that is for the first time in the history of this planet, a country created a trade surplus of $1 trillion. That is, exports minus imports was $1 trillion. The point I'm making is right in front of us. As you people know, China and India were almost at the same level as late as 1978, but today China is about six times in their GDP, around that in per capita GDP too, because we have very similar populations.

None of these countries did it by accident. They did it by design and by an almost unreasonable refusal to accept the second best. Today I want to sketch five pillars on which that design, which I have mentioned, must rest.

First is, of course, high aspiration. This is psychological. It is all about relentless refusal to be ordinary. Every one of us, our children, our grandchildren must say, 'We have seen other countries in our own midst do it. Why can't we do it? Therefore, we will do it.' In 1945, Germany and Japan, as you all know, or at least the older ones here know, were reduced to just rubble.

What rebuilt them was not only the Marshall Plan and the other US-sponsored plans for reconstruction of these two countries. It was a collective decision made by millions of individuals in these two countries to pursue excellence with something close to fury. The famous sociologist Max Weber saw this impulse long before that, and he said that disciplined, aspirational work ethic is the spark that actually lit the industrial revolution.

Therefore, what we need today, according to the well-known political scientist Deirdre McCloskey, is what she calls bourgeois dignity. What is that bourgeois dignity? She believes that bourgeois dignity flourishes in a society that genuinely honors the innovator and the wealth creators. All of you are innovators and wealth creators assembled here, and not the rent-seeker or the license-holder.

We have all gone through that. You know, India was a license raj, and even today we see a lot of rent-seeking around us, right? Now, as long as our brightest in Kerala and elsewhere in India see a government posting or a government job as the safest, folks, we are actually burning our best fuel even before the engine starts.

Aspiration builds civilization. We all know that very famous saying. But aspiration alone is not enough. Without a free market framework, ambition indeed becomes frustration. We have all gone through that phase. I used to be a strong socialist, leftist, before I went to France in early '70s. And I was completely confused because we had been told time and again that leftism was the only solution to India becoming more prosperous.

But when I went and saw in France that roads were clean, everybody was well-clothed, everybody was well-fed, trains ran on time, telephones worked, all of that. Then I realized that there was something wrong in my thinking. And that's when I was transformed from a confused leftist to a determined, compassionate capitalist.

Now, Milton Friedman's core insight remains undefeated, and that is, he said, every voluntary exchange between a buyer and a seller creates value for both sides. Otherwise nobody will buy, otherwise nobody will sell. You people know that very well. So it's very important for us to remember that market is not an ideology. It's not this ism, that ism. No, it's not that. It is actually a concept, a technology for turning individual ambition into collective prosperity.

Now, what is it that we need to do? First, of course, we have to discover the alchemy of work. Indians are very proud of working hard. No doubt about it. Particularly people from Kerala, when they go outside, I don't know in Kerala because I have not lived here, but outside their own state, outside India, Kerala people are one of the hardest-working people, most sincere. However, I do want to respectfully complicate that pride. Indians have a lot of pride in saying we work hard. However, I want to respectfully complicate that pride. What do I mean by that?

That is, hard work without discipline, without quality, and without precision is like motion without progress. South Korea's pali-pali, you know, it's called pali-pali in South Korea. The famous culture of hurry produced infrastructure at a breathtaking speed. But that speed was disciplined and matched by what I would call orchestrated teamwork, with every person playing their part like musicians in a symphony, not soloists competing for the spotlight.

I used to be an advisor to the President of South Korea for several years, almost 20 years ago probably, and so I know South Korea pretty well. I used to go there often, and I've studied how they have progressed. As I told you earlier, South Korea and India had just the same per capita GDP in 1952. Today they are probably about 15 times that of India. Anyway, economist and Nobel Prize winner Paul Krugman's observation is worth tattooing on the walls of every boardroom. There must be so many boardroom people sitting here. And he said it's very important to remember: productivity is not everything, but in the long run, it is almost everything.

So the key to prosperity is productivity. The key to prosperity is what each one of us can produce in an hour of work. What value, measured in whatever you want, rupees or dollars or yen, whatever it is. Therefore, a nation's standard of living ultimately tracks its output per worker, not its total GDP, not its headlines. We somehow, all of us, get extremely excited by the total GDP figures. But that's not the real thing. It is output per worker, measured in whatever currency you want. That's what determines how prosperous a nation is.

Our most dangerous old idea is that cheap labor is our competitive edge. In 2026, that idea is not just wrong, it's totally wrong. In addition, it is actually a trap. You all know that robots do not ask for increments. AI does not take sick leave. You know, I was in the Daimler-Benz factory in Germany several years ago, and it was about 7:15, 7:30 in the night, and the chairman took me around, and we went to the forging shop, and those huge machines, and there was no worker in that place, was banging away at 7:30. And he said the beauty of this is at 7:30 in the morning, it does it with the same precision, same enthusiasm, same energy as it does at 7:30 p.m.

So therefore, we should remember that cheap labor cannot be our competitive advantage because technology is slowly replacing labor. Therefore, the only path forward that we have is to move from being just the world's back office, world's cheapest manufacturing place, to being the best value producer. How do we do that? We do it by innovation in our laboratories and in our high-precision factories. We therefore have to go from being just labor-intensive to intellect-intensive work.

The third pillar that I want to talk about is trust and integrity. Francis Fukuyama, all of you know, a very famous sociologist, spent a career studying why some nations prosper and others stagnate. His answer, distilled to just one word, was trust. Not just trust between friends or family, because that is indeed universal. There's always trust between husband and wife, between parents and children, you know, children and parents, all of that is given all over the world in every culture.

However, what he said was what distinguishes prosperous nations from poor nations is the level of trust between strangers. That's very important for all of us to note. I want all of you to remember. And that is the confidence that a contract will indeed be honored. All of you are business people, you know the importance of valuing a contract. That a regulator is applying the same rule to everyone, and that the person on the other side of a transaction is not looking for an angle.

My friends, corruption is not merely a moral failing. It is an economic catastrophe, as has been proved by economists. Not me. I'm an engineer. I'm not an economist. And it is an immoral one. Corruption is actually a heavy tax on the poor who cannot afford the workaround. It is a big toll on the entrepreneurs. There are several entrepreneurs here. It's a big toll on the entrepreneur who either pays the toll, some entrepreneurs pay the toll, and many actually abandon their own venture.

And as Tacitus, the great Greek philosopher, observed more than 2,000 years ago, more than 2,000 years ago, he said, 'The more corrupt the state, the more numerous the laws.' It is extremely important for all of you, you are well-educated people. It is extremely important for you people to know that as early as 2,000-plus years ago, thinkers, philosophers realized that the more laws a country has, we know we are known for having lots of laws, right? The more corrupt that country is. It is for all of us to say enough is enough.

Second important observation that sociologists make is that complexity is where corruption hides. By creating more and more laws, by creating more and more approvals, by creating more and more steps, the creators are seeking corrupt money. Therefore, the remedy is radical simplicity. Fewer rules, applied equally, enforced consistently, and with no discretionary gaps for rent to accumulate in. All of you know what is meant by rent. Basically, it's corruption.

The fourth pillar of the architecture for an aspirational prosperity is what the sociologists call informed leadership. Look at the tiger economies, and you find a striking pattern. You know, as I told you, I used to be an advisor to the President of South Korea. I used to be an advisor to the mayor of Seoul city. I used to be on the board of DBS Bank, Singapore. I was a trustee of the Singapore Management University. Many, many things. So I have spent considerable time in these countries. I have studied. I have understood. I have talked to people. I have listened. And when you look at these tiger economies, you find a striking pattern that the people running the government are not merely politically skilled. They're intellectually formidable.

This is a very important point. Singapore and South Korea treated governance as a technical discipline rather than a performance art, giving big speeches and saying thundering sentences. That is not governance. Governance is a very important technical discipline. Their cabinets in Singapore and South Korea were populated by engineers, by economists, successful, highly accomplished engineers, economists, and scientists. That is, people who understood the difference between the nominal and real GDP growth rate, who knew what the middle-income trap was and how to escape from it. And these are the people who could model the second-order effects of a tariff change, tariff increase, before signing it.

This is not elitism. This is certainly not elitism. Pilots who do not understand the basics of aerodynamics, they're not being humble. They're actually dangerous. They should not be allowed to fly a plane. So knowing the innards of what functions one performs is a basic requirement. If any country wants to move forward, India has no shortage of intellectual talent. What we need is a culture that routes the talent towards public service, and more importantly, a public that demands it.

That is the biggest challenge that we have, that we need a public that says we want the best people to be in our government, and we want the most meritorious people to run the government. So we need a culture that puts the most meritorious and most value-based people into positions of power.

The fifth pillar is what I term the social compact, that is, putting the interest of the society ahead of one's own personal interest. The deepest secret of every prosperous society is very simple. That is, its citizens have agreed, without a formal written contract, to treat shared spaces and shared institutions as valuable as their own.

In Japan, the word 'omotenashi' describes a public hospitality so thorough that it extends to strangers in train stations. I've been to Tokyo so many times. I have experienced it. To payments at midnight. In Tokyo, you can walk at 2:00. There is absolutely no worry. A lady can walk at 2:00. Absolutely no worry. To rivers running through city centers.

You know, I may tell you a very interesting conversation I had with the wife of my brother-in-law, that is, Sudha's younger brother's wife. Sudha's younger brother, Shrinivas, has been a professor of astrophysics at Caltech for about 43 years. As you know, Caltech is number one in the world in physics. His wife, Hiromi, she's Japanese. And one day we are having lunch at home, and she said, 'You know, Japan is losing its character.' I said, 'Hiromi, what happened?' She said, 'You know, in earlier times, if we saw a purse lying on the road, none of us would go near that.' But the...

The other day, a young man took that purse from the middle of the road and kept it on the sidewalk and he left. How can you ever touch a purse that belongs to somebody else? So therefore she said in my opinion Japan is going down. I mean you can imagine their level of integrity, their level of honesty, and ours. So that is the thing. Citizens keep public spaces clean because they have internalized the idea that public space is their space. I must say that in this index Kerala is far far better than all other Indian states. There is no doubt about it. It's such a pleasure to come to your cities, your towns, and see how you have built a culture of keeping the public space clean. That's something all of us have to learn. In India, we too often treat the public space as belonging to no one. No one. That's why there is corruption because public money, government money, or you know, it's nobody's money. Anybody can take it, right? There are reasons why India is like that. I don't want to go into that. We must remember that private excellence cannot survive in public squalor. It's very important for us to remember. You can build the most beautiful office tower in the world and if the road outside there are potholes and the gutter runs open beside it, folks, you have not built prosperity. There's no prosperity in that place. You just built a small oasis. And please remember, oases do not grow economies. There is no place in the world where there is a desert and it has made people more prosperous there. It is very important to remember the words of Edmund Burke who wrote in his book 'The Reflections on the Revolution in France' as early as 1790. It's probably about 236 years ago. And he said, 'A nation is a partnership among the dead, the living, and those yet to be born. Therefore, we must invest in things we may not live to see completed and maintain what we have inherited from our previous generation as if it belonged to our children because it indeed does.' And it's particularly true of public spaces. It's particularly true of our character, particularly true of other characteristics. Having talked about the five pillars, now what is the triple mandate, triple compact? If we want to achieve a desirable prosperity for India, there are three major players in this and I'll talk about what each of us should do. One of course is the business community. You people, I mean, you're the most important player in that because you create wealth, you create jobs, without you, and you pay taxes so that public governance system can indeed work. So without you there is absolutely no hope for the country to become more prosperous for the poorest people. First, remember that 'jugaad' was never a strategy. It was just a coping mechanism. It is ingenious, yes, but it's not sufficient for a prosperous future. That's very important for Indians to know because in India wherever I go they say, 'Oh jugaad, we'll do this, we'll work around, we'll do this and we'll progress.' No, the world will not pay a premium for workarounds. Kindly remember that. It will pay a premium for German-level precision, for Korean-level speed, for Israeli-level innovation, and for Chinese-level smart and hard work. That's, I mean, I've been to about 80, 90 countries in the world. I've observed the prosperous countries, poor countries, middle-income countries, all of them. But one thing is certain: that premium, the world will only give premium for what you produce if you have German-level precision, Korean-level speed, Israeli-level innovation, and Chinese-level smart and hard work. Therefore, please invest in R&D. Embrace Schumpeter's creative destruction, that you yourself give up the old methods and innovate new ones and absorb them quickly before the market destroys you. That's something very important for you to remember. That's what Schumpeter, as you know, the famous Austrian sociologist, economist, that's what he said: creative destruction. And remember that if this country has to progress, compassionate capitalism is the only solution we have. No other isms have ever delivered any value to any society in the world on a long-term basis. That's the reality. And I hitchhiked for 11 months from Paris to my hometown by soul. And I did, you know, I would stand at a gas station, somebody would give me a lift. So like that I did. I spent only about $4 a day. This is 50, 52 years ago. I have seen Western Europe. I have seen Eastern Europe. I had seen the Soviet Union. I had seen the Middle East. I had seen Israel. I had seen Iraq, Iran, Afghanistan. Of course at that time we were not allowed into Pakistan. So I had to take a flight from Kabul to Amritsar. The point I'm making is that the only way that this country can indeed become prosperous is if we embraced compassionate capitalism. But compassionate capitalism means the leaders of capitalism must have compassion. They must care for the poorest worker in the factory. They must ensure that salary increases are first given to that poor worker before they take their own salary increase. Therefore, they have to eat last. The corporate leaders must be the people who will eat last every day, you know, when they take decisions. Now let me come to what is it that we can expect from the government. The government has to transform to become a service state, not a control state, not a gatekeeper state. If a young woman in a Kerala town wants to build the next biotech company, the path to her first license should be as smooth in Thrissur as it is today in Palo Alto. That should be the objective of the public governance system. They should say that we as human beings, we in Kerala are no less than anybody else in the world. Therefore, we will challenge and we will make sure that our regulations, our licensing system will be faster than what it is in Palo Alto which has become the cradle of innovation in the world. Government is also expected to remember that every day of unnecessary friction by the governments is a business not started. If we take away the enthusiasm of an entrepreneur, maybe today he's very enthusiastic to start something, tomorrow he may say no, I don't want this, there's a lot of harassment, so he may stop being an entrepreneur. That means it's a business not started, it is a number of jobs not created, it is taxes not paid, and most importantly it's a dream that has been deferred or destroyed. Now let me come to the professionals. There are several professionals assembled here. Adopt what I call the 'shokunin' mindset. Shokunin is again an East Asian word. And if you adopt the shokunin mindset, you will become so genuinely excellent in your work that the world has to appreciate. The world has to come to you to buy and not look away because what you produce is most valuable to the world. I've always told my younger colleagues at Infosys that performance earns recognition, recognition earns respect, and respect earns influence and power. Therefore, the only power worth having is performance and that's the only power that lasts. Remember that there's nothing else that lasts because rest are all just talk, you know, this thing. It's no value. Amartya Sen wrote that what matters for a person or for a nation is not what you have. It's not what you have today but what you are capable of doing. That is really what matters to every individual. That's what matters to your children. That's what matters to your grandchildren. Not what I have but what I can be, what I can do. That's why every parent wants their children to perform better than them because they have realized this wonderful words of Amartya Sen that what matters is not what I have today but what my children can do tomorrow. India has the demographics and the digital infrastructure. That's one area where India has done a wonderful job. Digital infrastructure. There are very few countries in the world which have been as successful in creating a digital infrastructure that India has done. We also have the intellectual capital. There's no doubt about it. We are building the collective discipline. We are building the willingness to put the team, the community, and the nation ahead of ourselves. That's, that's therefore the need of the day for all of us is to build that character to put the interests of the society ahead of personal interest, not to violate any laws of the land, to pay all our taxes properly, to keep our public spaces clean, to ensure that whatever duties we have are fulfilled 100%. Folks, what I am asking for is not a miracle. It's really not a miracle. I spoke about the architecture. I spoke about the five pillars and all that I'm asking for is just a redesign. Singapore was not lucky to become much richer, per capita richer than America. South Korea was not lucky to become whatever 10 or 12 times the per capita GDP of India. They made hard choices. They made tough choices. They made aspirational choices because they had a dream. They had national pride. They wanted their countries to be a place where the poorest man had access to more than just the basic needs of education, health care, shelter, you know, nutrition, etc., etc. They wanted every citizen to be prosperous. And that was not very glamorous when they made these choices. So therefore they made choices about education, governance, integrity, and welcoming foreign investment. Folks, we too can make those choices. In fact, we must if we really want. Finally, let us leave this hall today carrying high aspirations in our minds and steel in our spine. Let us build the India of 2047 as our respected Prime Minister has exhorted all of us to do. Let's do it with the imagination of a poet, the rigor of a scientist, the courage of a soldier, and the patience of a craftsman shaping stone after stone to create something that will stand long after we are all gone. Folks, the Indian dream is not a distant star. We're already walking its landscape. Let us build it worthy of those who will come after us, our children, our grandchildren, great-grandchildren, so that they can indeed be proud of us. Thank you very much.

A woman and a man. Start off with the woman and then man, then women, man, etc. Because generally I find in India men are so aggressive that they will not allow women to ask any question. Please do.

No, can you put it as a simple, simple question?

Which journey? The hiking?