At a recent startup-conference, Commerce Minister Piyush Goel’s comments about how India’s tech startups should aim for higher innovation sparked a big debate. Amongst his many statements, which included praise for the rise of Indian-startups, he also added the need to focus on deep tech and cutting edge innovation. At some point, he said, “What are India’s startups of today? We are focused on food delivery apps, turning unemployed youths into cheap labour so the rich can get their meals without moving out of their house.”
He has a point. In a vast and unequal country like India, a unique dynamic has enabled the rise of a particular kind of tech company. These are what I call PSR companies—Poor Serving Rich. Their business model rests on two key pillars:
1. A sizeable, affluent population (The Rich) with disposable income and a growing appetite for convenience.
2. A much larger, relatively unskilled and often desperate population (The Poor), willing to work for low wages to serve this demand.
India satisfies both these conditions exceptionally well.
According to Goldman Sachs Research—which analyzed air travel data, food delivery trends, and income tax returns—around 60 million Indians earn more than $10,000 (₹8.6 lakh) annually. These individuals form the core of the consumer base for e-commerce, food delivery, and other convenience-focused services. The same research estimates this number will grow to 100 million by 2027. So, condition one is well met.
Now, consider the supply of cheap labor. While precise figures are elusive, a 2022 report titled The State of Inequality in India (commissioned by the Economic Advisory Council and prepared by the Institute of Competitiveness) found that those earning over ₹25,000 per month fall into the top 10% of wage earners. Therefore, a monthly salary of ₹15,000–20,000 is still attractive to a large portion of the population—particularly the 50th–75th percentile.
With a population of 1.4 billion, even if we exclude children, the elderly, and others outside the workforce, hundreds of millions remain willing to work at these wages. This is the price point at which many tech startups hire delivery personnel, warehouse workers, drivers, and other operational staff.
Let’s break it down:
At ₹20,000 per month over 25 working days, that’s ₹800 per day. For a 10-hour workday, that’s ₹80 per hour—less than $1. If two orders are fulfilled per hour, labor costs come to ₹40 or under $0.50 per delivery. The affluent customer earning $10,000+ per year might place 50–100 such orders annually, costing them just $25–$50—a tiny fraction of their income for the luxury of convenience.
Everyone seems to benefit.
The delivery worker earns an above-median wage.
The Rich enjoy momos or biryani delivered to their doorstep within minutes.
The tech founders strike it big, often becoming billionaires and national icons.
Shareholders rejoice as valuations climb.
And the average Indian beams with pride, boasting to NRI relatives about our tech prowess—we can order a bar of soap and have it arrive in under 10 minutes! Can their “developed” countries do that?
But here’s what we overlook: none of this would be possible without a vast, economically vulnerable underclass desperate for any job. These are the individuals migrating from rural areas where agriculture no longer pays. They come to cities because that’s where The Rich live—and, more importantly, where the PSR jobs are.
The Rich already employ live-in or regular-part-time help for cooking, cleaning, and driving. Today, tech has enabled “micro-PSR” opportunities. You may not work for the rich man in that fancy apartment, but you can deliver him a sandwich—and that might be enough to make a living.
This brings us to a crucial question:
Is this really cutting-edge tech?
Or is it simply technology enabling a capitalist opportunity to scale labor arbitrage legally and efficiently?
Many of these companies argue they’re job creators. Indeed, some employ hundreds of thousands. What’s wrong with that, they ask?
And yet, if we truly introspect, we realize what is happening isn’t really putting India at the forefront of tech. It’s exploiting an opportunity that exists. There’s a lot of poor people who need a job. There’s enough rich people who justify platforms where an army of poor people run around all day trying to make lives of these rich people better. That’s where it begins, and that’s where it ends. They do create jobs, and it is not the companies’ fault that the job market in India is so desparate, that you can hire a man on a bike driving around making deliveries for less than $10/day. There’s nothing inherently innovative or technologically advanced about that. It’s not artificial intelligence, semiconductors, or patentable IP. It’s not moonshots or breakthrough products.
That’s why Commerce Minister Piyush Goyal’s recent comments urging Indian tech firms to “aim higher” are valid. He faced criticism—accusations of stifling ambition, ignoring corruption, and the lack of ease of doing business. While some of these grievances may be true, they miss the point. If PSR companies can succeed despite these obstacles—raising capital, hiring at scale, and completing millions of deliveries a day—then surely higher-order innovation is also possible.
The minister’s point stands: India still struggles with large-scale, commercial innovation. We’ve mastered jugaad—a kind of frugal, temporary fix—but that’s not scalable, nor is it world-class innovation.
Why aren’t we more innovative?
It’s complex.
It starts with a rigid societal structure where questioning authority is discouraged, stifling creativity early. Add to that a shallow capital market—big innovation needs big money and a big risk appetite, both of which are scarce in India.
The kids of industrialists might have the capital, but often lack the hunger, risk appetite, or vision to change the world. They’ve been raised with comfort, not ambition.
Ultimately, the minister’s comments are a timely wake-up call. Let’s not confuse success in building PSR platforms with global technological leadership. True innovation demands original thinking, risk, and vision—qualities we must cultivate more widely.