Friday, May 25, 2007

Manmohan springs a surprise

Don't pay huge salaries to CEOs, that was Prime Minister Manmohan Singh's advice to corporates at a meeting of CII in New Delhi yesterday. (See below link to the full text of the PM's speech.) This was the fourth point in the 10-point social charter that he suggested to the Indian corporates which are riding the crest of an economic boom.

This seemingly Leftist turn by the architect of India's capitalist revolution is a surprise, and what led him to formulate this charter will be a topic of specution for long. Was it politics, social concern or worries about a malfunctioning economy?

Let us go to the speech where he spoke of the fat salaries that corporates pay:

    "Four, resist excessive remuneration to promoters and senior executives and discourage conspicuous consumption. In a country with extreme poverty, industry needs to be moderate in the emoluments levels it adopts. Rising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest. The electronic media carries the lifestyles of the rich and famous into every village and every slum. Media often highlights the vulgar display of their wealth. An area of great concern is the level of ostentatious expenditure on weddings and other family events. Such vulgarity insults the poverty of the less privileged, it is socially wasteful and it plants seeds of resentment in the minds of the have-nots."

Though an element of truth in what he said can't be ruled out, the ills he referred to are nothing but inevitable realities of the near-capitalist society that we live in. The earlier socialist governance model did address some of these points, but the way it collapsed makes us only ponder over any available alternatives.

Manmohan Singh was the one who in early 1990s dismantled the bleeding socialist economy and replaced it with free but regulated market economy. Quite rightly he himself has now done a reality check as to where the new economic model has taken us. The speech is an indication that the economic growth that India has been trumpting is largely confined to cities.

Forget villages, look at the underbelly of our premier cities. Small islands of luxury are surrounded by nothing but misery and deprivation. The infrastructure for basic necessities -- water, power, housing, health, medical facilities, education and transportation -- is in a shambles inspite of the booming economy.

How much has the goodness percolated down? If it hasn't why?

It's commonly believed people have lots of money. Though disputed, some economists say, even the poorest is now less poorer. Let us assume it is true. But then, where are these people spending their money? Has the system enabled them only to get more consumerist? Do we have enough other avenues where money can be more wisely invested?

A society cannot rest merely on glittering malls; Only knowledge and intellectual wealth can provide a solid foundation. Many developed nations, especially the US, has been able to achieve it. That's the reason why the US attracts even people who are opposed to it.

The current boom which the corporates exempify is only one side of the story. Manmohan Singh's speech points to the other incomplete side of Indian economy. The charter will have more cerdibility only if Manmohan Singh succeeds in convincing his colleagues in politics and bureaucracy on the need to let go the unmonitored government control on key infrastructure areas, and allow increased partnership with enterprising invidividuals, and private institutions.

The poor and middle class depend on the government. As long as our government institutions are synonymous with inefficiency and corruption, what hope the real India will have?


-- Full text of Manmohan Singh's speech

1 comment:

  1. That's a good post. landed here after a long gap. Howdy!

    Well, that was really a good speech by MM Singh. But, who heeds to it? ??????