Our country is very unequal. As per the Income Tax data of the Government of India, out of India's population of 150 crore, only 2 crore people pay taxes, more or less. These 2 crore people are super important for the nation. This small population is paying 70% of the income tax and 40% of the GST.

Sourav Mukherjee, author and founder of Marrs Investment Managers, in this episode, through his years of data research, explained why India's middle class has reached a breaking point today. You have written an entire book that the middle class is no longer making money or will not be able to make money. We had an image that we save money. We are conservative people. Now it is visible that this has completely broken down, even from voting. The impact of social media is so much that 27% of personal loans are for vacations. Then, number two is going to concerts. This type of behavior has reached such an extent that the Indian middle class is now among the most indebted in the world. Household debt to income. In most countries, this ratio remains between 15 to 22-23. We have reached 32. If I am earning ₹100, then ₹32 is my debt. ₹32 is debt. For households that have borrowed money, 40% of their income is spent solely on paying EMIs.

Who is the middle class? From 5 lakh to 1 crore, all these are middle class. This is the middle. Tell me 5-6 points. The main principle of the middle class, that I will do this, I will do this, I will do this, is breaking. What will be the effect of this? Till 2020, white-collar jobs were growing at 11% each year. Out of 80 lakh graduates annually, 34 lakh were getting jobs. In the last 3 years, the trend of white-collar job creation has basically become zero. So, are those who are studying getting absolutely no jobs? Because jobs are so few. In our country, people have become addicted to taking exams. So, some are taking JEE, some are taking UPSC. And if you look at the data, the success ratios are super low. So, I have met many people who have been fighting for UPSC for about 10 years. A bright person, how much useless time is he spending in his life, giving exams. But at a national level, there is so much else we could achieve as a nation if we could free up people's time and energies from these colossal exams.

Tell me now, based on your experience. Where do you see 5-6 businesses which are going to be an opportunity? Before we start today's podcast, if you have found anything valuable from this channel, please subscribe. It's free. It takes less than a minute, but it means a lot to us. And to listen to the audio experience of this episode, please follow us on Spotify. The most stressful part of shifting houses is packing belongings safely. There is always this tension that all the luggage is loaded properly and reaches its destination without any damage. That's why I use Porter. Whether you need to shift within the same city or from one city to another, Porter Packers and Movers handle both types of shifting. And the best part is, they do multi-layer packing with professional loading and unloading, so that your belongings remain safe. That's why more than 13 lakh families trust Porter with a 4.8+ rating. To know more about our title sponsor Porter and their services, check the link in the description below.

You know, the good part that I was telling you, that we did a podcast just a few months ago, you gave a couple of predictions. Hmm. And out of those predictions, two-three have already come true. Oh, wow. One of them, we were just discussing the women's one. Yes. Cricketers. Yes. It's bang on. Smriti Mandhana and Jemimah everywhere, in every brand. And, you know, one thing is that brands are pushing. Right? Second is, the public likes it. The public is loving it. Or, like, they love it. I see the interactions, the engagement. Because you said this, I started observing it more. Hmm, hmm, hmm. It's just, I think, the beginning. Because, as I was saying, you know, when we did the last spot, one is, women themselves are rising rapidly in India. Their education is higher. Their achievement level in education, women's, in Class 10, 12, college, is much higher than men. Second is, women-led businesses are becoming increasingly successful. We see in the RBI data every year that the default rate of women entrepreneurs is half compared to men. Right? So, women are earning money. Naturally, women earn money. The company, the corporate, that will give advertising money, will say, "Hey, I am trying to appeal to women. No point having a middle-aged man endorsing the products." And the other aspect is, these women are being genuinely successful cricketers. You are defeating Australia, defeating South Africa, defeating them on big stages, going to their countries and defeating them. Naturally, everybody loves a winner, right? And women are winning. Women are increasingly winning, even in Indian economic life. So, I think this story will continue. When we talk again on December 26th, let's see. My precise prediction is that per endorsement, top women cricketers will be rivaling the men. So far, as you said, the trend has been solid for the last four months. If India, Air India, Indian women win a T-20 World Cup, then perhaps my prediction will be conservative. Perhaps the per endorsement rate of women cricketers will become higher. But over the next four-five years, as women in India, generally, we women in India, get increasingly wealthy and successful, I think there is a good chance that our women, our women cricketers, will end up earning perhaps more than them. Okay, so that's this story is about making more. Other stories in which you have written an entire book. Yes, yes, yes. You have written an entire book, "Break Point on Middle Class," that the middle class is no longer making money or will not be able to make money. What is the entire thing that you are trying to say?

So, look, our entire thinking for the last three-four years is that the old India is being left behind. Right? So, as we discuss, women cricketers are now surging ahead of men. That is, old India was middle-aged men hitting the ball around, getting big bucks. New age, new India is women from small towns, from humble backgrounds, rising in the world. So, similarly, if we look at another perspective, our mental model of middle-class life in India is breaking in three ways. First is, there is no particular benefit seen from university education. We have presented a lot of data in "Break Point," our "Break Point." Graduate unemployment. Graduate unemployment is around 30%. Meaning, out of all the graduates in India, one in three are single. The unemployment rate for those who are illiterate, uneducated, is 3 or 4%. Right? So, the first thought we had, that we will study or make our children study, and they will do something great after graduating. That model has largely broken. Right? We still have to work hard, but I am not so sure just toiling through Class 11, 12, and through college and getting some degree is going to result in some great, great jobs, because data suggests that is not happening. So, the first thing that has broken is the entire concept of graduation, that "study and your life will be set." Yes, the obsession with graduation, I think, will gradually fade from people's minds.

The second thing we are seeing is, we had an image that we save money. We are conservative people. We do not spend extravagantly. That was the image of middle-class India. Right? If someone spent extravagantly, they were either behaving like a very rich person. Now it is visible that this entire picture has also broken. The impact of social media is so much that one in four personal loans are for going on vacation. 25%, 27% of personal loans are for vacations. Then, number two is, as we are discussing, going to concerts. Right? Coldplay is coming. You take a loan of 7,000-8,000, 15,000 rupees to enjoy a bit at the Coldplay concert. Right? So, this type of behavior has reached such an extent that the Indian middle class is now among the most indebted in the world. So, if we compare it with other countries. Household debt, household debt, household debt. If you exclude home loans, exclude home loans. Household debt to income is 30 to 33% in India. In most countries in the world, this ratio remains between 15 to 22-23. In China and the US, it is around 20. We have reached 32. Right? We have become world champions in borrowing money super fast, and social media has played a big role.

What do you mean by 32%? Meaning, whatever our household earnings are, of households, one-third of that is outstanding debt. It can be seen in another way. If I am earning ₹100, then ₹32 is my debt. ₹32 is debt. And another way to see it. For households that have borrowed money, 40% of their income is spent solely on paying EMIs. Right? So, forget food and drink, 40% of income is going into paying EMIs. Right? And RBI, to give the central bank credit, has published a lot of data. So, for example, one in two middle-class Indians is now indebted. Most people who are indebted are juggling multiple loans. Right? And then for loans below ₹50,000, for loans below ₹50,000, 70% of those who have loans below ₹50,000 are juggling at least three loans. Right? Now, ₹50,000 is not a huge amount. That means why three loans? Because the person is paying one from another, from the second to the third, and is spinning the cycle, spinning the cycle. And I met many such people spinning cycles while writing the book, and I was shocked by the devastation social media has caused in the last 5 years. It has driven people crazy. People see on social media that Raj is going to London or Paris. They say, "I want to go too." Secondly, I don't earn like Raj, but I have come because the bank is giving me credit, giving me a loan. I am also going to London, Paris, Maldives. Right? So, aspiration has become industrialized. Earlier, there was a link, right? That the more you earn, the higher your aspirations. Now that link is broken. Now aspiration has become industrialized. Everybody wants to live the jet-set lifestyle, whether they have the income or not. Right? So, another myth has broken. And the third myth was that if we get a job, we will work hard, spend long hours in the office, impress the boss, sit day and night, impress the boss, get promoted, and move up in life. Data shows, brother, you can do all that, no one is stopping you, but your real wages, your earnings, real wages, meaning your earnings after adjusting for inflation, will not increase much. For the last seven-eight years, in Nifty 50 companies, I am not talking about small companies. We have analyzed the data of Nifty 50 companies in "Break Point." After adjusting for inflation, wages haven't risen now for nearly a decade. Right? So, expenses have increased, but salary has not. Yes. After taking into account the cost of living. Now, the cost of living is increasing. We have presented a lot of data in the book. The cost of living is rising at 8-9% per annum. Hmm. Which means, every 10 years, every 10 years, your real wages are decreasing by about one-third. Right? So, your salary growth, which is around six-seven percent, the cost of living is increasing at 8-9%. So, you are falling behind by 3% every year. So, in a decade, your real wages are decreasing by about one-third. Now, link this back to my previous point. People are seeing the glamorous lifestyle on social media, Bollywood stars in malls, in Mauritius. Why am I rotting in traffic in North Bombay? I also want to go to the Maldives, even though my wages are going down. I am getting a loan, aren't I? So, I have met people who have taken 700 personal loans in the last five years. 700. One person has taken 700 loans, and he tells me that out of 700, I have repaid 670, but unfortunately, I could not repay the remaining 30, so people are after me. Right, right. And to take a loan, you and I, sitting in the studio, or whatever the viewers are, you can take 20 loans from your phone right now. And by the time the credit score updates, 15 days later, between now and then, you can do if you want, 40-50 loans, and the system simply can't pick up on that. So, how do you take 700 loans? So, at any point in time, again, it was a very touching story. Right? The person's income in one year was around 5 lakh. With an income of 5 lakh, 700. Math is not mathing. So, he basically fell in love with a girl who was an affluent girl, and he wanted to obviously give her the lifestyle that he felt she deserved. So, he did a lot of spending on her. So, he started, I think, initially with 5-5 loans. Then, to keep up with that, 5 went to 15 loans. And then he figured out that he could borrow one loan to repay another. But the problem in that is interest rates. Interest rates, even for you and me, if we were to take personal loans, would be around 12%. Right? For top-of-the-line people, it's 12%. But for people who are less affluent, interest rates can be 18%, 20%, 22%. Right? So, your compounding, compounding is tremendous, and you have to soon end up running faster and faster. Right? So, in fact, during the course of the research, which I met a CFO. I met a CFO at a prominent firm in Mumbai. Yes. So, he had taken 30 personal loans. And he basically went bankrupt. 30 personal loans. The CFO. Yes. So, his annual income is 60 lakh. So, I met a person earning 5 lakh. I met a person earning 60 lakh. And that's when we realized, Raj, that today in India, whether you earn 5 lakh, or 60 lakh, or 1 crore, everybody is broadly swimming in the same pool of increasingly few white-collar jobs, compression in wages, and crazy levels of debt. Right? So, these three principles of India, of the middle class: we will study, become graduates, then work hard, achieve promotions, earn, increase our standard of living, and save. All these principles have broken. They have broken. We have to build a new India. Right? Right. We need to bring a completely new way of thinking because we can't, you know, I don't think even I, on a podcast, or anybody watching this, can miraculously say, "Jobs will come." Jobs are not going to come, boss. Right? Jobs are not going to come from corporates. So, we have to earn a living. There is a lot of work in India, but there are no jobs. Right? So, the difference between work and employment is becoming very sharp. So, in India, whoever understands that there is a lot of work, even if they are becoming a dog walker. Right? In my building, two young people are dog walking. It started during COVID because people didn't want to leave their homes, and these youngsters were, they were 18 years old, they were smart kids. Right? I think they were the sons of the car washers in the building. And they said, "We will take your dog in the morning and evening." So, in our building, there are about 100 flats, so imagine about 100 dogs or cats. And they would take them out. And then after COVID ended, people said, "Hey, I am lazy. I don't want to go down 30 floors in the lift to take them to the garden. You take them." And the child, now these children are 22-23 years old. They go in the morning and evening, walk about 100 dogs. And they end up earning 3-4 lakhs a year. And the rest of the time, during the day, I see them playing on their smartphones in the park. Right? Because during the day, in the middle of the day, the dog doesn't need to be taken out. So, they are, that's an example of, there was no advertisement given that "Dog Walking, Please Apply." Right? These kids were young, they were smart. They realized that there is work to be done, and they jumped in and created something. And to give a more glamorous example, someone like you figured out that a company can be built in India through this kind of figuring out. You came from Indore, used your mind, and built this great business. So, there will be plenty of work in India, just that there are few jobs. And whoever can understand this dichotomy, whoever can struggle with this dichotomy. Because this dichotomy creates a lot of pressure that, boss, I won't have a job. No one will be there to tell me, "Now get up. Now sit down. Today, this is your plan. This is your appraisal. This is your promotion." Right? That entire structure is gone. Right? And therefore, the rewiring of our minds, the rewiring of middle-class India, the rewiring, the rethinking of priorities in life, I think, will be quite profound. And we felt that by writing "Break Point," we want to try and initiate that rewiring, that rethinking. Okay?

Who is the middle class? So, explain this to me. Who is in the middle class? There is a small cottage industry that does this work. But jokes aside, jokes on the cottage industry aside. When we were writing the book, coincidentally, I found a very good book. I have a friend, Rama Bijapurkar ji. She is a very big consumer strategist. So, she wrote a very good book called "Lilliput Land." So, in that, she wrote her definition was that the middle class is a person who earns between 5 lakh to 30 lakh. Right? 5 lakh per annum to 30 lakh per annum. Okay? Annually. So, we looked at that, then we thought a lot. We looked at other people's definitions. We said, "Hey, first, let's agree on a criterion that will define the middle class." The first criterion is obvious. The middle class has to be in the middle. Right? So, the segment between the rich and the poor. But we said, there should be another criterion. Otherwise, what is the benefit of so much hard work? Our second criterion is that half of the country's income should come from the middle class. Okay? Half the income of the country has to come from the middle segment. Otherwise, what is the benefit of working so hard and debating so much? If only 30% of the country's income and 30% of the income is under discussion, then the discussion loses a lot of its vigor and relevance. Okay? Now, the question arose, how to identify the middle segment, and it should also be half of the country. Okay? Now, if everyone's income in our country was more or less equal, it would have been a very simple exercise. I just had to go to the middle of the income distribution and catch the middle people. Done. Top 25, bottom 25, life sorted. But as everybody watching this knows, right? Our country is very unequal. As per the Income Tax data of the Government of India, there are about 3 lakh people who earn more than one crore annually. More than one crore in terms of filing. Right? I am sure, right? If even more...

But unfortunately, they don't file. Right? So, I have 3 lakh, perhaps 9 lakh people who earn more than one crore. But there are 3 crore people who file. White money, white money. Today I was searching for a word, right, right. White money. There are 3 lakh people who earn more than one crore. And there are millions of people who earn less than 5 lakh. Right? Millions of people. Okay? So, if you want to pull half and capture the middle class, then you have to capture from 5 lakh to one crore. This is all middle. This is middle. Right? Because some are upper middle, some are lower middle class, but middle. Yes, from 5 lakh to one crore. Rama Ji's number was up to 30 lakh. But if we wanted to get half the distribution income, half the income distribution, we needed to drag the upper bound till 1 crore. So, we made a definition from 5 lakh to 1 crore. Many people will surely criticize this when the book is published. But that's fine. As I have said, the last spot, if you spend your life thinking what others will say, you will do nothing, you will remain paralyzed. But to be fair, I also take some criticism. In 30 lakh to 1 crore, life doesn't change much. Everything that happens becomes qualitative. What a point! Well, glad you said this. I have to say this. This is usually my line because I have done tremendous research on this. Right? That's why I said, I found out that a person earning 5 lakh is also taking loans heavily, and a CFO earning 60 lakh is also taking loans. But jokes aside, it's quite serious. Instead of a 2 BHK, it becomes a 3 BHK. The rest is all borrowed. So, the technical term for this is hedonic treadmill. On the hedonic treadmill, we keep going up and up, but we keep running. True. So, it's just to give it. Okay? But it doesn't change much. 32, you talk to billionaires. Ask them if there's a difference between 1 crore and 10 crore or not. That difference, perhaps we, we will be very keen to know. I am hoping there is some difference, that when I have 100-200 crore, perhaps I will have a different feeling in life. No, no, no. 20 crore and 20 crore to 200 is also the same. 5 lakh to 1 crore. Right now, as per the data of the Indian government, we are about 5 crore filers in both these ranges, between these ranges. Okay? 5 crore. Right? Just to put some numbers. India's population is 150 crore, 150 crore. Out of them, 5 crore people. Yes, voters are 100 crore. Only 5 crore filers. Right now. Now I am going to give a slightly sad data point. In February 2025, Nirmala Sitharaman Ji said that those earning less than 12 lakh do not need to pay tax, do not need to pay income tax. So, what does this mean? What does it mean? Only about 2 crore people, roughly, pay tax today. But this entire population, this 2 crore who pay tax, and the 5 crore who earn between 5 lakh to 1 crore. This population basically bears 70% of the income tax burden and roughly 40% of the GST burden. Right? And that's an amazing fact. Because, wait, wait, explain, explain. What is the total tax filing in India? You are saying 5 crore. Total filers are roughly 5 to 6 crore. Five to six crore people file. But after the relief for people earning below 12 lakh, they don't need to pay. Only about 2 crore people are paying. And how many of them will be below 1 crore? 1 crore. Below 1 crore. Out of this. So, these 2 crore filers are pretty much all below 1 crore. Because officially, according to data, there are only 250 thousand people above 1 crore. Ah, right. So, yes, very few. Almost, yes, absolutely. Right. But they have a lot of money. Just that, just that the numbers are few. So, there are 2 crore people in India who are earning between 12 lakh and 1 crore per annum. But these 2 crore people are super important for the nation. Right? So, they have three significances. Right? And this is where people like you and me can have, we enjoy 5 minutes of offense. Because no matter how much people abuse us, the country runs on our money. So, the first is this population, this small population, between 5 lakh to 1 crore and 12 lakh to 1 crore, we are paying 70% of the income tax, 40% of the GST. Right? Imagine, in a country of 150 crore population, but only these 2 crore people are bearing such a heavy load. Right? 70% of the income tax and 40% of GST. Okay? Now, let's come to their next layer of offense. Okay? In India, about 250 million, 25 crore people are in formal employment, meaning employed. They earn. Right? Some are formal, some are informal. Right? So, the person who brought me in a taxi, he probably falls under informal. You and I probably fall under formal. But people like us, my taxi driver, the lady who cooks for us. You and I, about 25 crore people are actually doing gainful work. Besides this, 25 crore are working in agriculture. 50 crore are sitting idle. I don't know what they are doing, but they are sitting idle, as per data. And these 100 crore are voters. And then there are 50 crore children. So, they are below voting age. We won't talk about them. Okay? Now coming back to the 25 crore who are working. Out of these 25 crore, just about 5 crore are in formal salaried employment. Right? They get a salary. They work somewhere. But these 5 crore salaried people, which includes the crore taxpayers of income tax, they employ the other 20 crore. So, this small population, 5 crore filers, 2 crore taxpayers. This population is unusually influential because the country's taxes are paid from their earnings. The government of India gets money from their earnings, and employment is generated for each person who is paying tax. Effectively, five other people get a job. Right? The cook, driver, maid. It's easy to think, but indirectly as well. The airline pilot, the security guard of the building, they also get it because of my earnings, because you are spending. So, right. And therefore, when this middle class, when the life principles of these 5 crore filers are broken, all their pillars are broken, the effect is colossal. Right? Which is why we worked hard for two years to pull this data together and show the picture that boss, a big change is happening. The construct of a middle-class life is breaking. We need to rebuild a new construct for our future, for our children's future, for the country's future. Because this small population is the foundation on which our economy is built. Tell me five-six points. One, one, that you have researched in the book and you have come down to this conclusion that okay, first is the middle class, this is the one taking the most load. We. Second is the main principle of the middle class, that I will do this, I will do this, I will do this, that is breaking. We. Right? What will be the effect of this, or what is happening? Found something. So, let's go to the 'what will happen' later on. Let's do 'what is happening today'. Okay? What is happening today? So, what the data shows, Raj, there is a listed entity called InfoEdge, which has a business called Naukri, which is an employment classified business. So, they have solid data from 2008 till today, till today, on how many white-collar jobs are being created. Right? By sector, there is data. So, according to that data, till 2020, white-collar jobs were growing at 11% each year. Meaning, every six years, white-collar jobs were doubling. Right? Solid good news. Right? Every six years, jobs were doubling. So, for a youngster, it's a terrific environment to graduate into. Right? Annually, India produces 80 lakh graduates. So, till 2020, out of 80 lakh graduates annually, 34 lakh were getting jobs. Right? 34 lakh were getting jobs. Okay? Then came COVID. We. After COVID, a little bit, when the unlock came, when the unlock came, for a year, jobs were created a little. In the last three years, according to Naukri's data, analysis of our company's annual reports, the trend of white-collar job creation has basically become zero. Right? Basically zero. It has become zero. 1% growth instead of 11%. Right? Now, if we look at the sectoral data behind this, the IT sector has a big role. Right? The IT sector, according to Naukri, is shrinking jobs by -15%. Right? And no prize for guessing what is happening behind this. To some extent, it is automation. To some extent, it is AI. The impact of AI has perhaps just begun. Going forward, the story of AI might become bigger. But it's not just IT. It's visible in Naukri's data. Retail. Retail jobs are also decreasing. Because a lot of automation is coming in retail. We can, we have all seen how, sorry, my generation has seen, there used to be a teller in the bank who used to give money. Then that teller disappeared, or she disappeared, and ATMs came there. Now, ATMs are also gradually decreasing because people are paying from their phones. So, as life gets more and more automated, the need for human beings reduces. Right? So, this story is very clearly visible. Now, now we can go to the West to understand. When this story drags on, when this story continues for 10, 20, 30 years, what happens? Because in the West, in the factories of the West, in the factories of the USA, Europe, robots started coming from the 90s. Okay? Right? Robots and automation. Then the factory workers were told, "You go home, brother." Then around 2002-03, those jobs went to China. So, the West's data, the West's data clearly shows. Between 1985 to 2005, the entire middle class of the West was ruined. Right? And there are plenty of experts in the West who have written about it, written celebrated books and papers on it. So, so in the book, we have cited the most celebrated paper which was written in 2004. It was published in an economics journal called The Quarterly Journal of Economics. It showed by three academics, Autor, Dorn, and Levy, that what is happening in the West is that those who do very small, menial work, like rubbish cleaning, their wages are increasing slightly because there is a need for garbage cleaners, and garbage cleaners cannot be automated. Right? And the wages of CEOs or hedge fund traders are skyrocketing. But those in between, like office secretaries, clerical workers, factory foremen, their jobs are also going, their wages are also going down. So, this is called the polarization thesis, that there is demand for absolutely menial workers, absolutely low-end workers, for whom it is not worth automating the work yet. And absolutely highly skilled people are superstars. And the person in the middle, the middle class, is destroyed. Right? So, this started in 1985 and continued till 2005. In a way, it is said that Brexit in the UK and Trump's victory in the US happened for these reasons. The middle class was beaten for 20-30 years. And they said, "Man, this is not fun anymore. Let's have a leader who will make us great again." Right? That's how the whole movement started. Right? So, this trend happened there. The middle class was destroyed. An elite has been created. To some extent, our data shows that that process has started in India. Just that in our country, inequality is already so large. So, if you hollow out the middle class, which is what the data suggests is a risk, if you hollow out the middle class, inequality will become immense. And the consequences are not easy to imagine, given that inequality is already so high in our country. But there is another dimension to what is happening. And this dimension, which I am going to tell you, has not happened to that extent in the West. Okay? In our country, in 2016, mobile broadband, mobile data, Jio basically made it free. Okay? Our population is young anyway. The median age is 28. So, that would have meant that the typical Indian who is 28 today, when he or she was 15 or 16, in their teenage years, they got free mobile data. When they were 18 years old. Yes. Right. Influential. And a lot of research shows that social media has a tremendous impact on your brain in your teenage years. Because your brain is still forming till the age of 24-25. The brain is still forming. Right? So, this child grew up from the age of 17-18 with social media as a part of their core belief system. Right? And by the time COVID came, during COVID, you couldn't leave home anyway, there was nothing else to do. Their entire mind and their phone fused together. Right? This had two effects. One was this daily story that whatever I am seeing on social media, that is real life. And it shows that Raj is in London, and they are drinking coffee or water there. Brother, I want to do that too, even if I don't have the income. Okay? And that led to the effect of debt. So, I call it the industrialization of aspiration. Right? Aspiration used to be different for each person. Social media said, no, your aspirations will be the same for everyone, and your aspiration will be to lead a glamorous lifestyle. But at the same time, influencers came. They explained, "Son, you can do F&O trading. Look, these giants have earned by doing F&O trading. You can also earn. Anyone can do option trading." So, thanks to influencers and online trading on mobile phones, in the last four years, India has emptied the pockets of about 9 million, 9 million, mostly men. Right? SEBI data shows, mostly men, mostly between the age of 30 to 40. We have emptied the pockets of 9 million men in the last four years. We have taken about 4 lakh crore from their pockets. Cumulatively, 4 lakh crore from the pockets of 90 lakh middle-class individuals, and given it to whom? Half has been given to Wall Street hedge funds, saying, "You probably didn't have money, here, take a gift of 5 billion dollars annually from India. Loot our poor people's money." The remaining 5 billion, we have divided. Our brokerages got one to two billion, and the big shots of Bombay got three to four billion. Who got beaten? That poor person sitting and thinking on their phone, "I took so many classes, so many YouTube courses, but why didn't I earn by trading in Bank Nifty and Nifty?" Right? So, these two aspects, crazy levels of personal borrowing to live a fantasy lifestyle and trading online in F&O on a scale not seen in any country. Forget a poor country like ours, we are still one of the 40 poorest countries. Right? I think this is related to the hollowing out of the middle class. Because, to be fair, if people had other ways to move up in life, I'm sure they would have taken that. Right? They had no other option. One, take debt on a scale. Second, trade. The result is, we are at a juncture in Indian history where, beyond the jobs crisis, which I think is happening around the world. It's not enough. In the US, UK, there are also many jobs. But in our country, 80 lakh graduates are coming out every year. Other countries don't have such a young population. Along with that, we have created this whole social media-driven borrowing and trading phenomenon. And the financial toll, the psychological toll, the financial toll, I think is catastrophic. And have you heard of Skinner box economics? No, no. What is it? B.F. Skinner did an experiment, right? Okay. So, he put a rat in a box and gave it food whenever it tapped. Okay. Great. So, they started giving food consistently. Whenever it tapped, it formed a habit. We. Then they did the same second experiment where they put a rat in another place, and when it tapped, sometimes they gave it food, sometimes they didn't. It's like random. We. Randomness. Random lottery. So, they saw that the one whose habit was formed, the random one tapped much faster. Ah. So, to whom you give sometimes and sometimes you don't. You give a lottery sometimes, you don't give it. They just tap for it and then they go for it. And then eventually, they couldn't understand the pattern at all. It just ended up becoming that whenever you give random rewards to any living being, they become more addicted. Very interesting. So, that was the same thing. It happened in F&O. Very interesting. So, I'll give another aspect of this. Okay? You mentioned F&O. One, one, I hadn't thought of it. I'll give another aspect of this. Which I have thought about for decades. And I couldn't wrap my head around it. In this book, I have given data about it. But the psychological explanation, I think you have provided it now. So, the book says that because jobs are so few, people in our country have become addicted to giving exams. We. So, some are giving JEE, some are giving UPSC. And if you look at the data, the success ratios are super low. Meaning, whether it's UPSC or a police constable post, in the state of Uttar Pradesh, only 2% of the candidates will actually get a job. But millions of people not only do they give the exam and the physical test for JEE, UPSC, police constable, they give it year after year after year. So, I met quite a few people who have been fighting for UPSC for about 10 years. And they say, "We will keep fighting until we are 32 years old." I think there's a time-out in that, they say something about it. So, I used to ask, and in retrospect, I was stupid not to ask the question, why do you do it? You can see it's very tough, right? So many people are giving it. And chances are you might, you know, buy a Maharashtra State Lottery ticket. Perhaps the chances of winning there are better than trying to get a seat in UPSC. Right? So, they said, "No, this is our life. Our so-and-so third cousin got it, so my chance will also come." So, to some extent, your Skinner thing is working. They know they won't get it, but sometimes they do, right? So, unpredictable rewards create compulsion. And it's very interesting. If you give it every time, they won't do it. But if you give it sometimes, people will keep doing it. Right? So, these people who give it repeatedly, they are not the ones who fail absolutely. Yes, yes. They are the ones who do well in one or two subjects, the rest. Exactly. That's what they said. Not once, last time, this number of mine.

I am still stuck on that, Saurabh ji. Those four marks, and it would be done. I would get into UPSC, I would make it. But unfortunately, what happens is those four marks come from somewhere else, and two marks are missed. And they go back to it again and again. Now, so I did some Googling, talked to friends in my office, I spoke to some of my civil service friends. So they didn't have this Skinner theory. They said that what is this? There is a guy called Louis Althusser, right? A French philosopher. He passed away, I think, a decade ago. So Louis Althusser said in the 60s that in any country, in any country, in any country, you control the population in two ways. Okay? Right? So one is law and order. If you cause too much trouble, the police will come. Law and order will be established. You will go to court. A case will be fought against you in court. But the second, the more powerful way, is called the ideological state apparatus. So the policeman is called the repressive state apparatus. And Althusser's view is that if any country wants to move forward, they shouldn't do too much of the repressive RSA one. Right? But the more powerful one, Althusser said, is the ideological state apparatus. Okay? So the ideological state apparatus, you implant in people's minds that this type of exam is success. This is success because you appreciate it. You celebrate in newspapers, on TV, in books, the people who got top ranks in JEE, went to IIT Bombay, Delhi, then became CEOs of some company. You celebrate them a lot. What happens because of this is that the rest of the population says, "Wow, this is the best. My child, or I myself, will also give JEE and I will also go up." You celebrate IAS officers. You create a culture of celebrating IAS officers so that people keep giving UPSC for 10 years. Right? And you can do it through newspapers, you do it through media, you can do it through Bollywood, you can do it through movies. And it's very important that a country builds this ideological state apparatus to keep the population in control, in control. Right? And in a way, our country's, our middle class's ideological state apparatus has been, and I belong to that middle class, that you will get marks in exams, then you will give exams, then you will go into this competitive struggle, even if your chances are low, this is your life's duty. Right? Now, it served its purpose when the odds were reasonable. But the odds are no longer reasonable. And therefore, a lot of what many of us are doing, this standard corporate rat race, and this exam story, a lot of this is counterproductive. Not only is it counterproductive at the individual level, think about that person who is a bright, easily bright person who is giving UPSC 10 times. Right? How much wasted time is he spending in his life, giving that exam. But at a national level, there is so much else we could achieve as a nation if we could free up people's time and energies from these colossal exams. And you know, God knows how many such public service and academic exams are there in which most people spend the formative years of their lives. So if we rewire that, if we use that energy properly. Right? We could unleash so much energy, so much entrepreneurial talent, that the country could move forward. True. And what is happening? You said many things are happening. Yes. So let's, today, let's move to the, let's move to the happy place. The happy place. What's the next level? Right? Where does the world go from here? So, so if we look back at other countries who have gone through similar changes. Right? Because, you know, we can't, we don't have a crystal ball to know what will happen 10 years from now. But we can always go back in time and understand other countries. So USA, to some extent, had a similar struggle between 1880 and 1900, 1910. So in 1880, Edison invented electricity, created General Electric, brought light bulbs, brought electricity. And between 1900 and 1890-1910, people who were making candles and lighting gas lights and driving horse carriages, all of them were done. Right? Because once the motor car came, you didn't need the fellow who was driving the horse, driving the horse car. Not did you need the stable cleaner, not did you need the gas light lighter in New York. All of them were done. Right? And a lot of people said, "This is a disaster, boss. Technology takes away jobs." To some extent, what is the criticism and discussion happening today is that AI is taking away jobs. But then what happened? Roughly around 1908-1910, jobs started being created because of technology. Right? So the Model T, the first mass-produced car, came out of Ford's production factory in Michigan. Ford's factory gave jobs to millions of people. Then with electricity, gramophones were made. With gramophones, famous, first celebrity singers emerged. Hollywood came. Jobs were created in Hollywood. And America entered a great age of prosperity built around the new technologies. Right? The technologies of industrial production built modern America. Right? I think if we, if we as a relatively poor country, if we use this new technology in our favor, there are three positive ways we could change India. Right? But you have to accept that the country is changing. If we, if we don't accept change, it's the same old story of giving UPSC for 10 years and getting into JEE. If you remain in that, then there's a lot of trouble. Right? Because you are behaving in a prehistoric manner in a fast-changing technological landscape. But before we go to the happy part, tell me, you said you want to go deeper. On education and jobs, that with the old model, are those who are studying completely jobless? So, the data, Azim Premji University published research about two weeks ago. It's scary to even say it, because reading it was also scary. This research came out after our book was published. So I will just narrate the research that Azim Premji University is giving. So they are saying that in the year that you graduate, that year, out of 100 graduates, only seven will get a job. Right? That job doesn't necessarily mean a white-collar job. Any kind of job. Yes, yes, any kind of job. I think, regardless of gender, seven people, seven people will get a job out of 100 graduates in the year that they graduate. Out of that 100, only two to three out of 100 will get a white-collar job. Right? In the year that they graduate. Right, right. Then as they get older, right? After all, one has to earn, one has to put food in the stomach. So as they get older, they will compromise, do something or the other. By the time they are 29-30, most of them will end up in some form of employment. And therefore, overall, if we look at the graduate population in India, out of 100 graduates, 65 to 70 have something or the other to do. Doesn't mean it's white-collar employment. But they have something or the other to do. Okay? Because they do something or the other, maybe they drive an auto-rickshaw in Bombay. But they get something or the other. Right? Another way to understand the Azim Premji University research is that they are saying that annually, about 25 to 30 lakh jobs are created for graduates. Right? 25 to 30 lakh graduates get jobs. Doesn't necessarily mean white-collar jobs. Some form of employment is found. 25 to 30 lakh graduates. Maybe they get a job on a factory production line. Now the reason this is a little troubling is that 80 lakh graduates pass out annually. Roughly 1 crore people join the labor force annually. So if 1 crore people are coming into the labor force annually, and you are creating 25 to 30 lakh jobs, then obviously 70% of the people are left scratching their heads, wondering what to do, how to earn. Right? And that's the challenge for our country. This goes beyond the middle class; it also affects working-class elements within this group. But don't you think this can be a part of luxury unemployment? You know what luxury unemployment is, right? That your parents are working, because of which you are sitting at home, and you are thinking that one day I will get a good job, only then I will do something. Until then, you just sit. So if parents weren't working, if they were not so luxurious parents. Not even luxurious. If you look at even, I was reading another data. I don't know its validity because it was very independently small. But I am just going to put it out. Because we are talking about that, even if you go to small villages, whose parents perhaps earn less than 5 lakhs a year. Right? Even for them, because their grandfather, father, mother, everyone has worked and built a house, bought a mobile. They have studied. After that, they are sitting at home. They are still using phones, sitting at home. They will do a job when the need arises. Do you think there is, possibly, some part of the population which is doing that? Because in urban cities, there is a large population of these. Yes, possibly. So I am not, I am not making the case that there is a lot of discontent in the country. Because honestly, if there was discontent, then something would have happened. Right? Because when I go to small-town India, when I go to villages in North India, it doesn't seem like people are on the verge of revolution. That hasn't happened. So it's possible that people are pretty happy that they are getting some money from Ram ji, and some "Beti Bachao Beti Padhao" or some state government dole, and along with that, there is a little income from parents, and I have free broadband, so I do F&O trading at home in the village. Right? So entirely possible. But my bigger point was that person's resources are still being wasted. Right? If you, if you are saying we want to develop the country, we want the country to move forward. Then brother, if you cannot give some work to 70% of graduates in the year that they are graduating, right? Sorry, in the year that they graduate, you cannot give some work to 90% of graduates. And over the course of many, many years, you still have 40% of graduates doing perhaps what you are describing, right? Chilling. Then there is a problem. Because then you are feeding them. And remember, right at the beginning, what I said is, all this money is coming from the small middle-class segment, basically 3-4 crore people are working hard to distribute these doles to all these people. Right? But is this permanent unemployment or just temporary unemployment? I don't see anything temporary about this. Right? It's been going on like this. As per the Azim Premji University study, and as per the data we are getting, it's been now several years like this. According to their study, the situation has been like this for about 20 years. According to the Azim Premji University study, the situation has been like this for about 20 years. The data we have used, the job data, it suggests COVID is a major inflection point. After COVID, the chain of white-collar jobs has largely broken. The last three years have been quite tough. As far as I understand, AI, automation, automation in factories, automation in offices. Right? Robotization in factories, automated production lines, and AI in offices. Its importance is there and will continue to grow. Right? And therefore, it doesn't look like there is anything temporary about this. So we then applied a lot of minds to say, how does it change? Right? So it can be changed in three ways. Yes, it can be changed. We are saying this based on studies of other countries. First is technology itself showing its productive side. Right? We call it. The substitution effect is what is happening now, and eventually, its complementarity effect will come. So, for example, just sticking to AI, as LLMs, LLMs and generative AI become more powerful, as the cost of AI falls, even the smallest companies in the world, even in third-world countries, will say, "We need to use AI." And a lot of the use cases, a lot of the actual implementation of LLMs into practical use of AI will happen through Indian engineers. Right? And maybe that engineer is in the office of TCS or LCL Tech, but I think there is a high possibility that there will be gig workers. They will be gig workers sitting in their bedrooms, wherever, in Indore, Chandigarh, Coimbatore, and they will be doing data labeling, cleaning, and bot training for the whole world. Right? You mentioned that. Right? Yes, 100 million people, 100 million people can get work in this way. Right? And 100 million might turn out to be a small number for all I know. But I am confident that when AI needs to be used, the world will say, "Hey, call Indian people. Get them to do the work." Right? The second piece is as people realize that there are no jobs, but there is a lot of work. And that is a mental mindset shift. Right? Remember, I spoke about Louis Althusser and the ideological state apparatus. That same ideological state apparatus can start drilling into people's heads that, "Brother, don't look for jobs. Look for work. There is a lot of work." I think entrepreneurship in India will take off. Now, the data here is quite encouraging. Right? So, from various sources, we have data that in India, about 1 million entrepreneurs are emerging every year. Right? Not perhaps of your stature, but those opening their own beauty parlors, opening their own restaurants, dhabas, opening their own security guard agencies. Right? Micro-enterprises are many. Many are being created. And then formally registered companies, about 5-6 thousand formally registered companies are also coming up annually. And funding is also being raised for them. Right? So about 40 billion dollars of Angel, VC, and PE funding is also coming to India. The Indian government is also providing venture capital in various ways. PSU banks are giving Mudra SME loans. So money is being raised. Now, maybe not all 60 million will get funded from what I am saying. Only 10,000 companies get properly funded every year. But it's enough to keep all these unemployed graduates interested. Everyone is seeing that instead of looking for a job, it's better to start something of my own. If I get funding, then it's great. Right? I can build something big. Even if I don't get funding, at least I will earn a livelihood, I will have a means to move forward in life. Right? So this mindset is developing to some extent. And programs like Shark Tank, I think, have done a terrific job in legitimizing this. Because when I was young, a little bit of a businessman, when I was a child, in my mind, a businessman was some shady person who drinks alcohol at night and handles black money during the day. That was my image when I was growing up. I knew my mom and dad work, this businessman is something shady. Then I realized when I became a businessman myself, it's fine, man. You are a regular person. And then I met plenty of businessmen and women who are perfectly decent people. So, this ecosystem needs to grow. The Indian government's data, called NSSO, NSSO, its data is already showing in urban India, the number of people earning a livelihood from doing their own thing is roughly the same as the number of people earning their livelihood from doing a job. Right? It's slightly more. Slightly. Jobs are around 19-20. Jobs are more. Jobs earn more. Yes, the numbers are the same for these people. But those with jobs earn more. But I think AI might have something to do with that earning coming under pressure. But jokes apart, we need to create an ideological state apparatus or an ideological apparatus which says it is perfectly fine to have a crack at setting up your business as early in life as possible, even at 16 years of age. Right? The earlier you start, the more you learn. If you fail a few times, nothing wrong with that. The funding ecosystem has become decent. Wherever I go, Delhi, Hyderabad, Bombay, a decent VC ecosystem has developed. The ecosystem of angels has developed and will develop. Right? And we need to create a whole new, a whole new ecosystem to remove this obsession with entrance exams from people's heads and start doing business. At least the earlier the age, the better. Right? Bill Gates, after all, was a dropout, and so was Mark Zuckerberg. America, again, going back to America. America made peace with this point of view 50-60 years ago. Microsoft was created 50 years ago. Bill Gates, Steve Jobs, another dropout. They said, "Man, going to college is overhyped. Let bright people, hardworking people, entrepreneurial people create their own things, regardless of whether they have a stamp from a big college." This thing, I think that's the second thing we need to adopt. Right? And the third piece is a mindset shift where we move away from seeking legitimacy, status from society, from the government, from corporate. That corner office, that VP title, that big car, that lovely suit. The external markers of success. The external markers of success, I think, increasingly will mean very little. And the sooner they can implant this in their minds that disregard the external markers of success and focus on internal skill building. Right? Read, learn, think, train yourself, learn from other smart people, and build that skill set. Internet. Right? Because one of the things I have learned in the last 10 years, from the time I wrote "Unusual Billionaires," is that I have seen that the best business people in India, their critical ability, their core skill set is that constant ability to quietly read, think, learn, and not worry about what others are doing or what others are saying. Right? Think for yourself, think for yourself. And it's that quiet building of a skill, what Warren Buffett calls an internal scorecard rather than an external scorecard. Those successful business people, for them, this comes naturally. Buffett and Indian equivalents. Right? I spoke about Berger Paints and Kuldeep Singh Dhingra ji in "Unusual Billionaires." I think he exemplifies it. I have seen the Dhingra family never try to grab the limelight for any reason. They are among the richest families in the country. But that ability of that family to say, "Hey, keep your head down. Learn, read, work hard, constantly improve your business, and create a money machine which spans decades, generations." This piece, we, like middle-class people, have to adopt. Right? So whether you get a breakthrough award or not. Right? My job, my colleague's job is to keep learning about the country, keep pushing yourself, keep teaching yourself new skills. And that's hard for a middle-class child because we grow up saying, "If you get marks in exams, you will get a prize, only then will mom and dad be happy." Aspirations. Yes, aspirations were external markers of success is what mattered. What do you know yourself? That's irrelevant. Did you get marks in the exam? And that then permits into corporate life. Did you do good work or not? Doesn't matter. Right? Did you get a promotion? Did you get a cabin?

Did you not get a cabin? Is there a parking space? If you park your car outside, Aarti must definitely be junior. Right now, it took me a while to say it. As recently as four years ago, I used to have a car. I used to think about this sort of nonsense and I said, "To hell with everything, I'll just travel by taxi. I don't want any headaches." Right? And it's a big feeling of liberation that I don't have a car. I agree. I travel by taxi. I have no problem. Yes, if there's a very potholed road in Bombay, then I feel, "I wish I had a 10 million rupee SUV." Then I think about the opportunity cost. My compounding would be lost. No, man, I'm good with this taxi. So I don't have a cabin. Yes, you don't have a cabin. Other people have, like me being the entrepreneur or let's say whatever CEO or leader you want to put it. I don't have a cabin. My managers have cabins, and everybody has cabins. Then it's a very liberating feeling, which you said, "Why even bother?" I sit at anyone's table on the go. Today, it will be there. Meaning what? So there, a guilty admission: my cabin is my small cabin. That's a guilty admission. Right? I still have my meetings in it. But yes, I am trying to move beyond that too. Like the first time when I had an office, my first office, I had a cabin, and then I was like, then that thought came to my mind. I've seen those suits, so now I have to wear the corner one. One day my cabin should be bigger. In this, like I dreamt. And after coming to this office, I dropped that mindset. It's the most liberating feeling. I think we now have four-five different, we have offices in four-five different places around the world, and in some of them, I don't have a cabin. It means nothing. Fantastic. I remember about 8 years ago, I saw a photo of Mark Zuckerberg. We were at his Facebook office in San Francisco, and I saw a photo there. He just had a laptop and he was working on the floor, like on the open floor, like anybody else, in hoodies and jeans. And you know, at that time, he must have already been worth 100-200 billion dollars. So it struck me a lot that the guy is sitting on the floor like everyone else. And I remember on his laptop, the reason I remember the laptop is that camera on it had a full tape stuck on it. So I found it quite interesting that he thinks it's a security issue. So I thought I'd stick one too, but then I realized, man, I have to do Zoom calls almost every other day. But if Zuckerberg can sit in the middle of the floor, right, then then I should. I learned this from Ashish Mahapatra. Oh, really? Of of business. You know, of I have heard about the company, never had the fortune of meeting him. So when I met him, he is an incredible person. I think he is one of the genuinely one of the most clear and sorted entrepreneurs. He has a great framework for life. He understands everything with great clarity. You know, how how you can bring. I I just want to tell you because you should meet him. It's like the sophistication of a proper guy. If you want that, he can talk like a McKinsey consultant in boardrooms. And then a Delhi street-smart entrepreneur at the same time. Like that combination is lethal, and you don't find that. So, so I have never met him, but I will give you something which validates your point of view. So I was put on some award jury. Okay? So I think I think it was a Forbes award jury. And for one category, we decided that this is the Entrepreneur of the Year in that particular category. So, as is often the case, the award function happened in some big hotel in Bombay, a grand award function. Everyone else came, he didn't come to receive his award. He sent somebody else. I remember that. I never met him, and the reason I remember is because I was supposed to give him the award on stage. He didn't come, he sent someone else from his company. And I remember thinking, man, this is an interesting person. Maybe someday we'll meet. Classic, classic. It came. So when I met him, his company was worth $5 billion, and he had no cabin. Wow, man, $5 billion and no cabin. I loved that idea. It stuck with me. And when we had, like, a comparatively bigger office, then we were like, "I'll do the same." Now, across all my companies, zero office. This kind of thinking, right? This kind of thinking is very powerful. Right? It seems like a simple level, you know, it's a kind of showing off, but it's not. That person who can move beyond external markers of success, right? That person, if, you know, by mid-20s, mid-30s, can move beyond external markers of success, they can achieve a lot in life. In India, it's powerful. So this third one, that's why I broke it into three parts. The most basic is, man, let there be 100 million gig jobs, people get the numbers. You said gig jobs, entrepreneurship is one. Meaning, you can break down entrepreneurship into parts, right? One is you build a huge empire, employ a lot of people, bring groundbreaking ideas, like that. That is one. And then the other is just you are alone, like a freelancer. That is also an entrepreneur. You are doing it alone. Which one do you think is more? I think why will each to their own, right? To each their own. Some people, to run a company, you don't just need business smarts, right? Negotiation skills and so on. To run a company, you also need people skills. Right? And not everybody has people skills. In people skills, the aspect of emotional control, managing people, it's a very distinctive skill. And if you are either an introvert or someone who lacks people skills, but you are able to build formidable subject matter knowledge, then doing your own thing as a gig worker on a global scale, I think it's very feasible, very possible. I think that will become a perfectly viable career option. So, suppose you could become the leading headhunter for financial services CFOs for the fintech world. Right? And if you do that on a global basis and you make a name for yourself through LinkedIn, through social media, through books, through podcasts, that I am the guru of hunting for CFOs for fintech companies the world over. Right? And you can just do that and get paid really well for it. Right? Anywhere in the world, if any fintech company needs a CFO, they will call you. You will have built your entire network of fintech CFOs. They will be on first-name terms with you, and you will be placing fintech CFOs around the world. So, so while the negative aspect of AI of job losses is apparent, the positive aspect of this being a connected world, I think we are not fully taking advantage of that in India. We still think a bit within our own country. Whereas the talent in our country, the education levels, they can be used to service the world. And I think that will happen. Increasingly, people will say, "If I need the world's best expert on, say, influencing podcasts, if that person is sitting in Coimbatore, you know, even if I'm sitting in Frankfurt, let me reach out to him." In that global ecosystem, we will find our place in the sun. Interesting. So, you said that to each their own, and if you can just become really, really good, both have opportunities regardless of the technology. Absolutely. Let me validate that. Right? Let me validate by using your own example. Right? Why did Macron do an interview with you? Right? It's not like he has to fight elections tomorrow and will do a podcast with Rajani to swing votes. He did a pod with you because he is just as interested, right? Or his team is just as interested in building his image here because, for all he knows, or we know, in his post-political career, he might be a business leader who needs to build out an India franchise. And if, therefore, people in India are familiar with him, then so be it. Plus, there will be enough people in France or across, across Francophones around the world, who will be watching your pod. Right? The global aspect of what we do is actually pretty powerful, right? And in a way, our life is a dance between appealing to a global audience. If we are doing something very niche, so if you are an expert on fintech influencers, fintech CEOs, CFOs, if you build a global audience, then you can make a niche thing into a big career. And then you loop back to local knowledge. Right? So you loop back to saying, "I am an expert on the Indore restaurant scene, on the Indore food and beverage scene." It's a niche market, but if you want to open a restaurant in Indore or do business in food, consult me or give me projects. I'll start a great restaurant for you in Indore. Right? So both games become relevant. But in neither of them will there be a boss to bless you, saying, "Man, your promotion, your VP, your this, your that, car parking spot." A lot of this is about making career decisions by yourself, accumulating knowledge, relationships, contacts, and then just the steady grinding over the years of building a franchise. Have you seen any country where this polarization happened and the middle class almost started to break? The middle class started to break, and the middle class's money started to decrease. You know, if they didn't do anything. But in hindsight, if you look at it, they also went through this period, and one country did very well, and one country did very poorly. So, look, two countries where the middle class was severely hit, which is very clearly visible, are the UK and USA. Right? So in both countries, polarization from the mid-80s to roughly 2015 was tremendous. Right? I saw it in the UK myself. My parents migrated to the UK in '91. We lived in one of the outer suburbs of London. There were all these call centers, the British insurance companies had their call centers. People would call there for their claims. So in the 90s when we arrived, it was a decent suburban town. By 2001, all those call center jobs were outsourced to India. By 2008, when I left that small suburb of London, all those buildings were empty because all those jobs came to India. Gurgaon, Bangalore. Right? And because for those British companies, it was far cheaper to employ a caller in India than to have a British person. Right? And if I go back to that town in England where I grew up, it's quite bad now. Right? Those buildings, that derelict town center, completely ruined, completely derelict. Right? It used to be a lovely shopping mall, high streets, nice shops, restaurants there. Now, you know, it's scary to go there after 8 PM. Drug dealers roam around, crime has increased, etc. Right? So, and this is not, you know, some forgotten part of the UK. This is a suburb of London. Right? And in 10 years, jobs went from there to India. Okay? And by the way, this is one of the reasons for writing "Breakpoint." These changes happen very quickly. So it's not like you and I are debating. It will happen slowly in 5 years. It's happening rapidly in India. And it's so fast that unless you are awake and alive, right? You can neither understand the risk to your business nor appreciate the upside possibility. So in the UK, I saw this beating. In the US, I didn't grow up, I go to work. But in the US, when I go to small towns, I can see the challenges in small towns in America. Why do small towns, even if you go to places like Philadelphia, its slightly working-class areas, working-class areas in a city like Philadelphia or Chicago, they are terrifying places to go to. Right? It's mind-boggling. It's a complete slum-like environment. Uh, there are young men wearing hoodies and with weaponry, and after 5 PM, no Uber driver will take you there. What about at night? Even at 5 PM, no Uber driver will take you there because they'll say they'll steal the car's wheels. You and I, we'd be finished. There wouldn't even be car wheels. So that's America and UK for you after 20-30 years of white-collar jobs being outsourced to India and blue-collar jobs being sent to China. So what's happening there now? So that's why in the US, Trump is there. Right? Right. So what we discussed in the previous point, but Trump cleverly did is he saw this and he said, "Man, these people are getting beaten. They don't understand why they are getting beaten." Right? Because, to be honest, if you and I lived through that, our entire lives would be upside down in 10 years. Right? Mind-boggling. Think about it. In 1984, Bruce Springsteen sings "Born in the USA," right? Basically, how proud we are that we are American, Born in the USA, we have a great life. By 2004, those jobs are gone to China. Right? Unemployed in the USA, it became that. Born in the USA, unemployed in the USA, it became that. Right? In the space of 20 years. And and and Trump, by 2014, is saying, "Man, this is an opportunity for me. All these poor, unemployed, frustrated, angry people. I tell them, why did these problems happen to you? One, China took your jobs, and all the other immigrants, India." Yes. Initially, he started in his first term. When he did his first term, he said all immigrants. And in the second term, he realized, let's vilify Asians, and then Indians. And then you can see, we discussed in the last part, what did he do? Out of nowhere, he attacked Iran, saying Iran is about to attack us, so let's attack them. And you are now seeing the consequences of that. Right? So neither the UK nor the USA has found any answer. But the politicians have capitalized by focusing on middle-class discontent. Now, if we want to take a positive story, a positive story. Before the positive thing, that in the UK and US, the middle class didn't understand that jobs were going, that this change was coming. This happened once in the UK, then in the US. Their jobs came to India. Their jobs went to China. Ours is now going to happen in India, and it is happening. Our jobs are being eaten by AI. Right? Meaning, our jobs aren't going to China or anywhere. It's just our jobs are going to AI. Yes. And your prediction is that the same thing will happen here. And it has started happening. Yes, it has started happening. So, UK and US, their state system was good. There was better healthcare, better probably kids' education. So they survived even then. Here, if this happens, then, yes. So we don't have education. We don't have health. So you brought up this issue, and in my opinion, I lived through the UK part, and I saw Brexit. I had come to India, but I saw Brexit sitting here. So three things happen, which are very interesting. When this is happening in real-time. Right? When it's happening in real-time. The town where I grew up in London, when it was being hollowed out, nobody told the people in that town what was happening. Right? It took me, because I used to go between India and the UK, it took me 10 years. I finished school, college, finished college, started a job. It took me 10 years to understand why the town I grew up in, in the suburbs of London, got hollowed out. The people there probably still don't understand what happened. It took me 10 years. And nobody told the people in that town. There was no, there was a local newspaper, but this kind of news didn't appear in it. And local politicians kept their mouths shut in that town in England. They didn't explain that all your jobs are going to India. Because I don't know why. I mean, they just didn't do it. Right? Similarly, when American jobs were sucked out to China. We, it wasn't until 2005-6, by which time most of the jobs had gone to China, that criticism started in the US, saying, "Man, your jobs have left here." And and and and that's the first part to realize. Even today, some people in India, like us, are saying that robotization is happening, automation is happening. When we were researching "Breakpoint," we went back and looked at studies in India. Studies have been done from 2012 onwards. We, that factory jobs are leaving India. Right? And the data suggests that factory jobs started to be automated in India around the year 2000. We Right? So research exists, it's visible in the data, but nobody mentions it because it doesn't suit anyone to publicize these things. If I am the employer automating my factory, I am not going to do a podcast with Raj Shivani saying, "Raj, I am automating my factory, laying off 90% of people." If I am the politician in that neighborhood, neither am I going to be telling my constituency, "I'm sorry, from tomorrow, you all will be unemployed." So, and the academic, the academic sits and writes his paper, but but nobody is reading his paper, other than geeks like me who are reading it. Now saying, "Oh, it's visible in the data in India that for 25 years, our jobs have been leaving factories." So this is the first problem. The second problem, even after the jobs are gone. Right? So UK, US jobs are gone. Right? UK call center jobs have come here. US jobs have gone to China. Even after the jobs are gone, it's not obvious what should be done. Right? So America is saying, Trump is saying, "I will create jobs in America." But how will you create them? Why will any factory owner in their right mind pay four times the Chinese salary to employ Americans in Michigan? Right? Or Michigan is not even a place with a huge, fantastic infrastructure that would give Michigan some competitive advantage. Similarly, if I am an insurance company in the UK, why will I, why will I bring the jobs back to the UK? Okay, to some extent, what Western companies are doing now. Rather than an Indian call center, which is the next hit we face, they are saying, now AI will do the work. So they are saying, now in India, instead of Indians in call centers, put AI. But it's not clear what you do in the UK and US to create jobs back there. Right? So that's the second problem. One is, when it's happening live, nobody talks about it. When unemployment and devastation have already occurred, other than creating racist sentiments in the Western world, Brexit, MAGA, it's not clear to politicians what is the economic answer to this problem. Right? And the third aspect of this, you are asking about constructive positive case studies.

Positive case studies exist, but they are few and far between. So, for example, Japan, I think, is a positive case study, right? In Japan, this kind of middle-class hollowing out is not seen. Right? So, when I have gone to Japan twice for work, I have traveled quite a bit in that country. I don't see the kind of devastation that is seen in the UK and the US. In Japan, the problem is the opposite. They have a declining population. Right? So, they have a lot of old people there. Their population has been shrinking. I think for 20-25 years. I think the government is also giving some incentives to have children. Right? I think incentives are available in Korea as well. They are available in Japan. Perhaps they are also available in China. So, this middle-class hollowing out has not happened in Japan. I won't be able to tell you 100% why this is so. Why were they able to escape this? Because they are also an industrialized country. But I guess they were able to prevent a large part of their jobs from going to China. Some, I am sure Toyota, Sony, and Panasonic would have sent some amount of production to China. But I think they were able to hold on to enough by automating the factory and robotizing the factory to the extent where there is no need for labor anyway. The factory is immensely robotized, automated. Plus, their population is not having children. So, it's not like there was a huge population to employ. The few people there had a very good education system, a very good healthcare system. They received good education and they put them in managerial jobs or finance jobs. So, that's one country I have seen which has escaped this. But I must also say that Japan did not take immigrants. Because if you take immigrants, that's part of the challenge, right? The UK and the US have taken a lot of immigrants. Those guys displaced local workers as well. The local workers then got screwed from both sides. One, immigrants came in. Second, jobs went to China or India. And the local fellow got completely zapped and then voted for Brexit or MAGA. So, Japan is a good case study. Now, to what extent we can benefit from it in India, I am not clear. And therefore, as far as I understand, we will have to think our way through this. No other country at as low a per capita income as us. Our per capita income is still less than $3000. We are among the poorest 40 countries. We are a poor country. But because our middle class was, is relatively prosperous, right? Those who pay taxes, the average income of taxpayers is 10-11 lakhs. So, they are second-world status. Because our middle class is relatively prosperous, AI is taking them down. So, it's a very strained situation. We are a poor country. Our income levels are similar to Sub-Saharan Africa. On average, we are like Sub-Saharan Africa. But the impact of AI on us is as potent as it is on the UK and the US. Right? So, this kind of situation where we are getting the worst of both worlds, where our income is not high, nor do we have any technological advantage at this point, and our education is going to be disrupted. Right? So, this is the situation. And therefore, we have to think for ourselves. Understand the problem. First, if you want to find a solution, you need to understand the problem. You have to understand the problem and then say, how do we move forward? In Breakpoint, we are saying we move forward by looking for the gig jobs that the new AI world will create, by changing mindsets, changing our ideology, moving away from rote learning and exams, becoming entrepreneurs early in life, realizing that jobs are few but there is plenty of work, training our children to be entrepreneurs rather than training our children to be office workers. And then turning to the government and saying, a funding ecosystem is being built, please make the rules and regulations for small businesses lighter, so that there is a complete entrepreneurial boom. And then gradually, perhaps, this exam culture will subside in 10 years. So, broadly speaking, today the problem is that education is not yielding results. There are no jobs. If you want to do business, you don't know what to do. Right? And in that ecosystem, those who are doing it, who have understood it, are moving forward rapidly. Right? And that's always the beautiful part of a free market economy. Right? If others don't understand the issue and you do, and you can leverage that understanding, then all power to you. Would you say that young people should not go to college anymore? I think education is necessary. Education is needed. Knowledge is all-powerful in this modern world. Right? Knowledge can make you God in this world. To what extent formal credentialing will take you forward, I think there should be a debate on that. Data shows that a person who has passed class 12 does just fine in India. That makes a great deal of sense to me. So, your point is that education should continue, but in a specific, specialized way. There is no need to get degrees that are very formal. Let me validate this point of yours. You created Figuring Out four years ago, long before I wrote Breakpoint. You figured out that there is a need for someone to explain the world in simple language to the masses. Right? So, India has a population of 150 crore. You figured out that if I can just explain the world to people, I can build a business for myself. Right? Effectively, you understood intuitively that there is a need in the country, and we are going to fulfill it. So, we need more entrepreneurs of that kind. All I am doing is basically formalizing that intuition that you had. I am saying, as far as I can see, the data is saying there are no jobs. Those who have jobs are seeing their wages destroyed. And I can see that social media is causing havoc because people are getting the wrong message from it. They are either getting deluded into some glamorous life which is completely unaffordable, or into some financial speculation which is a road to ruin. Right? The constructive aspect, the Figuring Out aspect of it, is getting lost in this craze for glamour and quick money. Interesting. So, two things on this. One is, before I ask you my question, which will start another discussion, tell me one of the craziest insights or something that you discovered while writing the book. Story. So, the one which... So, there was a guy, there is a guy called Harshad Shah. He posted on LinkedIn in June-July 2025. So, I have put his post in the book. Harshad Shah's post. In Harshad Shah's post, he showed that the entry-level salary into a decent white-collar job, right? Graduate's entry-level salary into a decent white-collar job, is basically 2.5 lakhs per year. Right? A construction worker in Bombay, Delhi, working overtime, earns 5-6 lakhs per year. Right? So, his post went viral. But leaving aside his post going viral, I couldn't get his post out of my mind for two-three days. Because, you know, I know so many people in my social circle where parents work so hard, spend so much on educating their children. And I know that 2.5 lakhs, 3 lakhs is what you get as an entry-level graduate in most Indian companies. In fact, 20 years ago, you got the same. 20 years, 22 years, 23 years ago, when I first came to Mumbai to build a business in 2004, you still got the same. You still get the same today. And today, a construction worker earns 5-6 lakhs. In fact, I was asking many auto-rickshaw drivers how much they earn. In most big cities in the country, an auto-rickshaw driver earns 5-6-7 lakhs a year. So, that was quite shattering for me. And in a way, this is the breakpoint. Right? You are brainlessly, mindlessly stuck in one mode. Graduate, get a job. When the data clearly shows that there is no benefit. But then, this data is skewed. Yes, please tell me. Why is this data skewed? Because if an entry-level construction worker earns ₹5 lakhs a year. Yes. And someone goes for a job, say an engineer or any XYZ person, they get hired for 2.5-3 lakhs. So, after 3, 4, 5 years, when the job salaries increase, the construction worker is still earning the same. This person's job salary might increase. So, let's address that point. Okay? A lovely point. Because the mental model you have created is seductive at a superficial level. And people like us from the middle class, we worked in offices through our 20s with this dream. But data... But salaries increase in 10 years, don't they? But eventually, people make money. But I will try to give you the data-driven story. The first thing is, again, back to the Government of India's income tax data, which is showing that a typical middle-class income tax filer, middle class defined as earning between 5 lakhs to 1 crore, the average filer's income is 10 lakhs. Right? The average income tax filer's income is 10 lakhs. So, therefore, that youngster who graduates and gets a 2-3 lakh job, if he ends up being the Indian average, will reach somewhere around the 10-11 lakh point. Okay? Remember, to get to this point where he got a graduate-level job, which according to Azim Premji University data, only three out of 100 get such a job. Right? Even the one who gets it, earns 3-3 lakhs. His parents have spent God knows how many years, 21-22 years, on that child's education. They have raised him with so much effort. A job of ₹25,000 a month. Yes. Right? ₹25,000. Exactly. And then, if he ends up being the average income tax payer, he will end up earning ₹1.5 lakhs. Okay? Now, let's go back to the construction worker. I agree with you, if he remains a construction worker his entire life, then he will remain at 5 lakhs. Right? But my reckoning is that person is far more likely to do something entrepreneurial and become your next Ashish Mahapatra, perhaps, of business, than the dude who is graduating. Because the graduate dude is self-selecting into a life of safety, structure, assured pay, bonus, promotion. Whereas the construction worker will say, "Man, I am working my heart out, earning 5 lakhs by working overtime, but I am laying this steel, I am mixing this cement, I am laying this pipe. What kind of opportunity can I get? Can I become a middleman? Can I become a contractor?" So, the people who refurbished my first house, telling the story, the guy who refurbished my, decorated my first flat which I bought in Bombay in 2008, I bumped into him on the street two weeks ago. He is now running a proper firm with 10 workers. He is renovating three-four flats in our Powai at any given time. His son is working for the Big Four. His daughter is an airline pilot. One daughter is an airline pilot, and the third daughter is studying fashion design. Right? So, he was, and before he decorated my flat, he was just a regular dude working for someone else, doing up painting and painting for flats in Powai. So, he moved from being a painter to hiring two-three people to do my flat up, and now he runs a proper firm. He has a small shop in our local shopping mall, and his children are in the Big Four, airline pilot, fashion design. So, so, I think that's where I think we need to reimagine that, man, going up by doing this job, the probabilities are far higher you will rise by being self-employed. I appreciate that the data currently shows that self-employed people are earning far less than salaried workers. But I think salaried workers' real wage growth will be tough because technology will put more and more pressure. Whereas for the self-employed, the SMEs, provided that person is entrepreneurial, their capacity to grow is higher. Interesting. Okay, all this is very negative. Oh, it's positive, isn't it? If you are a doer, if you are an SME, if you are an entrepreneurial person, it's positive. You are in business, building a business, then it's good for you. So, back to my childhood, I thought growing up, businessmen drink Scotch at night and handle black money during the day. That has changed. That has changed. I myself am a businessman. I handle white money during the day and drink juice at night. Okay. So, tell me now, based on your experience and the data that you are collecting and everything that you are seeing now, plus what you are seeing in the market globally, where do you see five-six businesses that are going to be an opportunity? Be specific, and we will talk about specific opportunities which you feel, "Hey, this looks like something can happen here." It doesn't matter if it's very hard, or very bad, or very easy. So, so, first, first, what I think will be a big opportunity, and you know, someone of the stature of Mukesh Ambani or a Jason Wang will get it. So, let me explain a little bit. Currently, what happens? If you are a big company and you want your project done, you call up a TCS or an Accenture. Right? They are big companies. They deploy millions of people to complete your app or your software integration into your systems. Right? Increasingly, as AI does a lot of this work. Right? As Cloud or Anthropic, Claude or ChatGPT does a lot of the work, especially for small and medium-sized companies who can't afford to hire a TCS or an Accenture. They will end up calling a smaller version of TCS, Accenture, and say, "I am a restaurant chain in South Africa. I have four fried chicken restaurants, and I want to put my entire customer servicing on AI. I want to put it on AI like Zomato's service in South Africa. Can you do it for me in 5 days for $5000?" Right? Now, I think, and most likely, an Indian company should emerge. And that company doesn't even have to have employees. They will just take the project and they will have a network of gig workers on their books like Uber. And they will say, "Who wants to do it? It's a five-day job. I am offering this much. Perhaps if the South African is giving $5000, perhaps this company will give $2000 and keep $3000 for themselves." Right? And because, remember, the South African restaurant chain might not necessarily know how to use AI to create its software. Hmm. But it knows that it just has to call this or go to the website of this Indian company and put this work request there. Right? So, this will be a niche business. And I think if you take this business model to its logical extreme, I think it basically destroys the business models of the conventional IT services companies. Right? So, I have some shares in Extention, so hopefully, before it crashes, I will be happy to sell some shares. Right? So, this is the first model. Right? Now, I told you this in the context of coding. But this is just as applicable for a company saying, "I need to train my employees in marketing." Right? Raj, can you create a curated set of podcasts for me? Marketing training, and my employees sell plastic pipes. Right? And there will be someone like you who will know how to use available content, AI, and we will create a five-hour training program for you in 24 hours on how to sell plastic pipes across India. And we will give you that content in four languages. Right? So, not just coding, but knowledge skilling of every sort. There will be intermediaries who will emerge who will say, "We will package it for you at low cost, at high speed, and give you whatever you need." So, remember, even for small businesses, time is money. If you give me that market, that training plan for my sales team, two months from now, my sales team will not earn for those two months. Right? And if you therefore give it to me in two days from now, I am that much more inclined to give it to you. And the more effective it is, the more I will say, "Next time I need it, I will go to Raj, or that small IT company that quickly built everything for us." Right? I think this will be a colossal industry. And I stress again, I don't think you need to build a very big company for this. You just have to build a system where you sit at the heart of a network of content or content creators, and you are booking the order, getting it done, getting the work out. Right? So, this will be a big industry, and a lot of gig jobs will evolve around this. So, basically, think of SG Zomato or Uber. This is Uber for white-collar work. Right? This is Uber for white-collar work. And this can also, like, I see many advertisements in India and abroad now that are entirely made by AI. Right? So, the model in this is also AI. The lighting is also automatic. So, you can imagine the whole media houses of the future will be basically AI houses. Right? And they will specialize in, maybe by product segment. So, India has a big play in this. Because why would you want to hire a Chicago-based media house if you can get the same work done in Oshiwara for one-third the cost? Right? And I think that time will come. And smart people across the world will say, "To hell with Chicago-based or Hollywood-based media houses. We will go to Oshiwara. We will get it done in North Bombay." Right? So, this will be a big aspect. Now, the next leg of this will be using AI to create original content, using the whole world of knowledge to create original content, original constructs, original intellectual property. Right? Here, I think China has done a great job. Right? So, what China has done in the last 10 years is got its universities to spend a lot of money to compete with America on intellectual property. So, let me give an example. Half of the world's new biotech drugs are now new drugs coming from China. 10 years ago, it was zero. It was all America. China said that all the world's knowledge is now on the internet. We are educated people. Why should we only make phones and why should we only make cars? We will create brand new intellectual property. Right? And I think we have enough intellectual firepower in the country to do it. We need to spend the money on it. Now, I am not so sure the government will spend the money, but I think our corporates should spend the money. So, let me give an example. American companies spend $700 billion annually on research, R&D. How much do Indian companies spend? $20 billion. Right? 135th. Right? So, we need it. And plenty of our companies have enough and more money. They have cash on their balance sheets. The stock market is saying...

Hey brother, how much do you need? Take it. Right? But the owner is saying, no, man, don't get into too much trouble. Don't know what will happen with this R&D, whether there will be any benefit or not. So, we have to keep making those old biscuits. Doesn't making those biscuits yield a 15% profit margin? So, my life will pass in that. I think a new generation Indian entrepreneur will say, "Screw this." Let's either raise the money from private equity or the stock market or borrow the money and throw it at R&D because we have seen China do it with no, no limited help from America. China has built R&D machines, which, as I said in biotech, they are doing equally. And perhaps after 20 years from today, China will be making all the biotech medicines, they will be making them. Then we will say, "Man, where did we fall behind? They are giving us trouble." They are saying, "If you want medicine, give us this, give us that." Right? So, it's a choice of ours as a country. Either we spend the money on R&D, and it's a choice for promoters, not so much for the government, or we get left behind. Right? So, this second thing, I find a very exciting possibility, that perhaps in the next 20 years, there will be a wave of R&D for us, where an Indian entrepreneur will say, "Why am I not the world leader in, for example, auto ancillary technology?" Right? And the third aspect is, in the line of work that I do, I feel that all the world's money, after 10 years from today, 20 years from today, all the world's money will be managed from India. Because if AI is going to, if technology is going to do a lot of the management, why should we be left behind in figuring out how technology can manage money? Right? See, as long as humans manage money, people think, "I will give money to my type." If I am a French, French, French national, I will trust French people more. I won't trust Indian people as much. But if anyway, gradually the managing of money will go to first ETFs, index funds, and then AI, then who cares whether that AI is Indian AI or British AI? Uh, so financial services, banking. So, Revenue, a bank from London, is spreading all over the world. It's an AI-driven bank run out of London. It has also come to India. In this way, Indian AI-driven financial services institutions will go global. And and a lot of people, especially younger people, are not going to care that this AI is Indian. Because, you know, the LLM below it is most likely American. And if someone has done something interesting on top of that LLM, something useful, provided I can see it's reliable. And it's regulated by the Swedish regulator or the European regulator or the US regulator. Uh, the fact that an Indian company is behind it, it doesn't matter. So, the ability to do things which are global, because remember, we are the benefit of, of, of the modern wave of technology. We in India are getting the latest technology. Right? We can't say we've fallen behind. Technology is available. Where we, where we, where we are falling behind is the utilization of, of technology for doing science, for doing R&D, for doing research. We are very content to do the day-to-day, earn the 15-20% return on capital and say we've done something great or achieved something. The Chinese are saying, "We are not contented with the day-to-day. We will use technology, push it to its limits, and create brand new intellectual property which we will monetize and squeeze the world." So, if that "squeeze" mindset of research, monetize, squeeze, doesn't remain, then we will get left behind. And again, I think that's the mindset shift we need to do. Rather than doing IT services, rather than just doing generic medicines, rather than just doing copy-paste of financial services, if you are willing to take the risk, do the extra effort, come up with brand new intellectual property, then there is a global market for it. True. How far do you think India is to America and China? Look, in per capita income, China is 5x, America is 30x, right? In per capita income, it seems like a big difference, a big gap. But I have watched China close the gap with America, and especially on the knowledge and IP front. I have watched China close the gap with America over the last 20 years, and I have watched America itself pull away from Europe over the last 20 years. And and and if I go back further in time, between 1880 and 1930, I saw, if I read about 1880-1930, Britain was the world's preeminent superpower. That was the world, everything was in Britain. By 19, in fact, if you read the description of the US in 1880, it's a poor country, there is poverty, there is darkness, they fight amongst themselves, there is gunfire. By 1930, they were the world's preeminent superpower. So, in 50 years, they brought about a complete change of power. They displaced Britain. And then over the last 20 years, China in 2004 was nothing. Right? They were basically a sweatshop for, a sweatshop for American jobs. China in 2026, half of the world's biotech medicines, new medicines are being made and coming from there. So, India, do you think if you compare the America of 1800 and the China of 2004, the things they did right, is India also doing some things right at the same level? So, I will give you the good answer. We are doing some things right. Some things, as far as I understand, we are doing wrong. So, let's quickly discuss the positive things we are doing. This whole passion for angel, venture capital, private equity that has come to India, this is positive. The Shark Tank story, 1 million entrepreneurs a year. Right? So, if you look at American and Chinese culture, the early stages of growth, take-off, such a culture is needed. Because these are ultimately, these entrepreneurs, invest money in the beginning. Yes, invest money in startups. You need that person, that person who is ready to take risks. Right? Because with the best film in the world, the angel is not going to call up, you know, he's not going to call up HDFC Bank or TCS middle managers, "Brother, do you need money?" He's not going to do that. Right? He looks, he wants someone who is saying, "I've quit my job, I'm putting my life into this. Do you want to give it or not?" Right? So, in our country, that population is forming well, forming well. Right? And very similar to America in 1880, China, China of 25 years ago. Right? That's a positive thing. And it's very difficult, by the way, to manufacture this. A lot of European countries, France, Germany, tried a lot. They told people, "Try, try, become an entrepreneur." And they are saying, "No, we have no desire to become an entrepreneur." Right? So, you can't manufacture this. There's a cultural element to this. And especially in our country, the age group below 25 today, and it's interesting, it's not just Gujaratis, Marwaris, Sindhis. I am seeing, you know, Oriyas, Bengalis, Marathis, Tamils, everyone is doing it. Yes, everyone is doing it. There's a fervor in everyone that now we have to become something and we have to achieve. And we need more of this. We need to king-size this ambition. The negative part is, there are still so many rules, so many regulations, and so much red tape that it drives a person crazy. So, I cited it in the book because I still can't believe it. So, if in our office, in the pantry, if we put a stove, uh, uh, even an induction cooktop. If we make, if you cook hot food, we cook food, you need a license. Right? You need an FSSAI license. You can make tea. If water is heated in a kettle. But if you make Maggi. Yes, if you make Maggi, fry an egg, then you need a license. Along with the license, you will have your annual inspection. There's a license fee. Hopefully, the fee isn't exorbitant, but there is a fee. But you will have an inspection. Right? Then if you put a chiller, meaning not a fridge, but if you put a chiller where cold drinks, cold drinks are kept. Even for your office staff to see cold drinks, open them, and drink them, there's a separate license for that. Right? Some licenses are given by the state government, some by the center. Meaning FSSAI gives them. Some have annual renewal. Some, I think, renew every two years. Some have annual inspection. Some are every two years. Right? So, we decided, man, we don't need this kind of headache at all. So, we decided, whatever food anyone wants to order, you can order from Swiggy. Now, what's the disadvantage in this? Somebody could have easily got a job in millions of small, small firms like, like, like, Mars being cooking in the kitchen, cooking Maggi, you know, making egg toast and all. Those jobs won't be created because of these crazy rules. Now, who is benefiting from this, I don't understand. If anyone from the Indian government is listening, please abolish these kinds of useless rules. Because these are the rules that kill jobs. So, in our book, we cited there is a portfolio company of ours. I won't take the name of the famous portfolio company because it will create unnecessary trouble for them. It's headquartered in Noida. So, they are, you know, they were created in 1995 and have become a big company, millions of dollars market cap. But the founder was telling me when he created the firm in '95, around the year 2000, because Noida is part of UP, so an inspector from UP came and said, "Where is your spittoon?" So, he said, "There's no spittoon here, we don't spit here." So, I didn't install a spittoon. So, that's why it's a violation. Every workplace must have a spittoon. Meaning, a place to spit. And if someone doesn't eat pan masala, then it's not written in the law, so you didn't make a spittoon, so he had to pay off, to pay a small fine. Right? So, in our country, there are thousands of such things where the whole purpose is to create something for some inspector, something happens from your office. That's why I said, no hot food will be made in our office. If anyone wants hot food, you order it. And if people make it themselves, then no, I don't have a license for that, boss. We can't do anything. Heat food in the microwave. We have a veg microwave, a non-veg microwave. Heat food. There's a kettle for making tea. But, you know, I don't want the headache of an inspector coming and saying, "Food is being made here. Where is the license?" Right? So, we need this. You asked me for the positive. This nonsense, this nonsense wasn't there in America in 1880. To be fair, perhaps it's not there even today. I did a podcast with Sagar, Wow Momos. Okay. He said that in India, you need fewer licenses to get a gun than to open a restaurant. I know, I know. Imagine in Mumbai, about 70 licenses are needed to run a hotel. And you know, you can, I know what needs to be done for each of those licenses. So, unless you are a big guy, like Taj or Oberoi, Indian Hotels, or people like that, for a regular person to start a three-star hotel in Mumbai, 70, 60-70 licenses. I immediately know what it takes for a restaurant, you're saying a hotel, a big one. So, that's why no one opens. That's why whoever opens takes the other route, saying, "Well, we'll see when it happens." Yes. And and then we question, then we ask, "Man, why aren't jobs being created?" Because if you make it so difficult to open a hotel, if you make opening a three-star hotel so difficult, not only that, does that mean a shortage of three-star hotels, which means the room rates for three-star hotels will also be $100, $200, 7000, 8000, 100. Where our office is, in Andheri East, comfortably, $100 a night is a three-star hotel. A three-star hotel will become $9400. So, so, and that is, that is Andheri, Andheri East. Which I will, I love the place because my office is there. It's not BKC. There are no three-star hotels in BKC. I think only five-star hotels. Okay? So, so, we want, we want the world to come and do business. We want to be competitive. But hey, if you want to, you are a business traveler and you want to stay for less than $100 a night. I'm sorry, this won't be possible for you. You, you lie down on the street or lie down outside the airport. Even if jobs aren't created, you know, that's the way it will be. This, what nonsense is what screws us. So, in the book, I have given a lot of cross-country data that the cost of land in India, the cost of land in Vietnam is 40% less. The cost of land in Vietnam is 40% less. In states like Maharashtra and Gujarat, the cost of industrial land is almost the same as Western Europe. Right? So, the cost of land in Vietnam is 40-50% less. Right? Because their leaders don't make different rules and increase the cost of land, they are not ramping it up. They figured out that if the land is cheaper, then factories will be set up, jobs will be created, money will be made. From that, we will earn something. Cost of working capital. Right? Cost of working capital. Let's say in the US it's 3%, but that's a rich country. In China, it's 3%. Let's say it's a big country. In Vietnam, it's also 3%. In our country, you won't get working capital for less than 11-12%. So, if you, if you can address the rules and regulations, cost of land, cost of working capital, combine that with this 1 million entrepreneurs a year. Right? Then think what can be created. Right? So, that's why in, in 1991, V.S. Naipaul wrote "India: A Million Mutinies Now." Now, I was in class 9-10 then. I read that there is so much anger in the country. I didn't know. I realized that people want to move forward, and everybody was damn angry. 1990, 1991, he was like, "What the help? Why can't I move forward?" Then Manmohan Singh ji and P.V. Narasimha Rao, they opened up the country in '91. Now, what do we need? A million entrepreneurs are being created every year. Those million entrepreneurs are saying, "Give us less red tape, give us cheaper capital, give us cheaper land. What can we do for people? We can create jobs, we can take the country forward." We are not doing that. Interesting. Well, cheaper capital is always a question of the entrepreneur. A lot can happen with cheaper capital. Now, cheaper capital, I wish we could make our podcast about it, but we can't make just that one thing. There are many things. I was speaking to somebody. I think I forgot. I can't recall. One, I talk to so many people every day. That's a good thing. The mix gets jumbled, what did this person say? What did that person say? Good things get missed. Like, I remember the good thing. And they said that if you reduce the cost of capital, then a lot of the country's economy goes up and down. It's not that you can just reduce the cost of capital. It's a big deal. Right? Because today, look, if you see the bond market in Mumbai, Andhra Pradesh State Government, Andhra Pradesh is a decent state. Andhra Pradesh State Government is borrowing money at 8%. So, think if it's a small company, if the government, meaning the state government, is taking it at 8%, then it will take it at 12-13%. It will take it at 12-13%. The Vietnamese are taking it at 3%. If you take it at 4%, then how will it compete? True. So, so, now you know, somebody has to go and tell our government, central and state, that borrow less. "If you borrow less, then how will I do projects? If I don't do projects, then where will my importance come from?" Right? So, it's a deep issue. I don't have an easy answer. So, but you asked me, what is the chance that we will pull off like China or USA? There's a chance because our entrepreneurship story is solid. A lot of data, a solid story. Money is also being received. Equity funding is decent. The problem is lots of rules and regulations, expensive land, and expensive working capital. Right? If we break even one of these three obstacles, rules and regulations. A year and a half ago, in the budget, in the February '25 budget, Nirmala ji had said that a committee would be formed to remove rules and regulations. So far, there's no significant news. So, hopefully, if that committee is working, they will finish their work soon and reduce rules and regulations. Reduce the cost of capital. We will accept the rules and regulations. Fair enough. So, that's a fair trade-off. We will also accept expensive land. Capital. That's the Sindhi businessman speaking. If money becomes cheaper, we will do a lot. We will manage the rest. Well, thank you so much. Pleasure. Thank you once again. It was fun talking to you. It's always a pleasure to say. Thank you, Raj. Thank you. Thank you. Thank you so much for watching this episode till the end. Now, you have to do three things. Number one, subscribe to this channel right now because the more you subscribe, the more valuable and better guests we will be able to bring for you. Number two, tell me in the comments right now what you learned from this episode and who is the next guest you want us to invite here and have insightful conversations with so that you can become a better person. And number three, definitely share this episode with at least one person because one conversation is enough to change someone's entire life. I will see you next time. Until then, keep figuring up.

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Top Investor's WARNING: End Of Middle Class Dreams & Loan Trap |Saurabh Mukherjea |FO535 Raj Shamani

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