If the Government Fails, Blame it on Big Corporate Paychecks

I fail to understand what happens to our brightest of leaders at times. Dr. Manmohan Singh is highly respected as an economist, was the pioneer of liberalization in India and is known to be pro growth and reforms.

Hence the statement he made the other day at CII about ‘rationalizing’ the remuneration of top corporate executives and their lifestyles is very much unlike him. Was it a politically correct statement he was forced to make or a surge of socialistic feelings (which is again so unlike him) is not known, yet in the times we are living right now, the whole idea is flawed.

The first thing is about the market forces. For a corporate to do well, you need the best workforce, especially at the senior level positions who have leadership roles, hence guiding the organization towards better results. Now, the availability of such talented and capable people is low, and the best people always come at a premium. Retaining top executives in a globally competitive work area is highly difficult. Most of the times, the remuneration of these people is performance based, and it is quite justified if they are paid according to their performance.

When the Honorable Prime Minister says that high salaries to these executives fuel the divide between the rich and the poor, and that these people should restrain from spending or showing off their wealth publicly, is it not that somewhere he is accepting the failure on the part of the government to take proper steps to bridge this divide, for it is the government’s job to raise the income and standards of living of the poor through its programs and thus bridging that divide, not by capping the income of others who are doing it absolutely legally and by their capability and hard work. Also, does the government has any business in deciding how someone spends his own money, what lifestyle he chooses to live in or that if he decides to live it up? And is it not hypocrisy to have such a diktat only for these corporate honchos who are making India proud globally and creating a wealth of opportunities and only making the economy grow, thus creating livelihood opportunities for the very same poor people who he thinks will have an objection to someone else earning more. Why is this diktat not also for politicians who also live it up, have grand weddings for their relatives and their own birthday bashes? It is well known to us what the sources of their income is, and no one objects to these people spending crores of public money publicly, each having cases of disproportionate wealth and tax evasion etc.

Is Mr. Prime Minister not able to see that these are the people who create so much wealth, employment and earn so much foreign currency for the country, make the country grow, thus themselves helping the poor. And the most direct thing to this is, the more that these people earn and spend, the more it is that they pay in taxes. Income tax, wealth tax, capital gains tax, sales tax, VAT.....what and what not? So this is the money that the government gets, which it is supposed to spend on welfare and development projects to help the poor, so the more the better. Then why is he so against it?

Actually, our leaders find new ways to shirk responsibility and blame anything and everything for their own failures, however illogical that might be. So, the government, which was not capable to bridge the gap between poor and the rich, not able to spend prudently and plan welfare and development measures properly, now blames the high salaries of these capable, hardworking and intelligent executives for its own failure. If anything, these kinds of moves hamper the progress of the country rather than the so called high remunerations of top corporate executives.

But then, we did not expect this to come from you, Mr. Singh, maybe any other neta saying it we would not have given it too much importance, because we are used to hearing such nonsensical statements from our politicians. But we always thought you were different, atleast in matters of economy. But this I guess, is Indian politics.