Posted on 05/26/2007 12:54:42 AM PDT by bruinbirdman
Manmohan Singh, the Indian Prime Minister, has stunned business leaders by telling them to pay themselves less, limit their profits, eschew lavish weddings and shun “wasteful” Western lifestyles.
Mr Singh warned an audience including some of India’s richest tycoons that they could face severe social unrest if they did not curb their spending and do more to bridge the country’s yawning income gap.
“In a country with extreme poverty, industry needs to be moderate in the emolument levels its adopts,” he told the opening of the annual conference of the Confederation of Indian Industry on Thursday.
“Rising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest.”
Mr Singh, who unleashed India’s current economic boom when he introduced market reforms as Finance Minister in 1991, has long been calling for more inclusive economic growth. But this time he went farther than ever in dressing down India’s business elite, striking a distinctly Gandhian – if not overtly socialist – tone. “The electronic media carries the lifestyles of the rich and famous into every village and slum. Media often highlights the vulgar display of their wealth,” he said.
“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 the seeds of resentment in the minds of the have-nots.”
Among the tycoons in the audience was Sunil Bharti Mittal, who is rated by Forbes magazine as the sixth-richest Indian in the world with a fortune of $9.5 billion (£4.8 billion). Also there was Jamshed Godrej, whose socialite wife threw an extravagant wedding party for Liz Hurley and Arun Nayar in Bombay in March.
Mr Singh’s speech highlights the ruling Congress Party’s mounting concern that it will lose the next election in 2009 if it does not extend the benefits of India’s economic boom to the bottom half of Indian society. The economy has been growing at an average of 8 per cent annually since 2003 and now has a middle class of about 50 million people and an estimated 83,000 dollar millionaires. But up to 40 per cent of its 1.1 billion people live on less than a dollar a day and have seen little evidence of growth apart from rising food prices.
Mr Singh’s appeal also reflects Congress’s growing reliance on its left-wing coalition partners, especially the Communist Party of India, after poor performances in state elections this year.
But political analysts say Mr Singh is treading a fine line between appeasing his socialist-minded allies and alienating the people who are driving India’s economic growth. Many economists say he should focus more on creating opportunities for the poor to generate wealth, rather than discouraging the rich from getting richer.
“His speech is at variance with his policies as Finance Minister and in his first years as Prime Minister,” said Pran Chopra, of the Centre for Policy Research. “This could worry the audience if it was followed by specific actions, but I do not think that will happen. This is just some sort of verbal comfort to those he thinks are becoming restless.”
Mr Singh used his speech to propose a ten-point charter for the corporate sector, calling for workers’ benefits, affirmative action on caste and environmentally friendly technology.
Yesterday his Government also announced an ambitious plan to provide pensions and healthcare for the first time to India’s estimated 370 million casual workers. The legislation, subject to parliamentary approval, aims to extend benefits to industries such as agriculture, construction, weaving and fishing.
An embarrassment of riches?
There are 36 Indian dollar billionaires
Their combined wealth = $191bn
$32bn is Lakshmi Mittal’s fortune. India’s richest citizen, who currently lives in Britain
Foreign direct investment to India last year totalled $15.7bn
There are 63 special economic zones planned to attract $13.5bn of foreign investment by 2009
Sources: Forbes, Indian Government, Thomson Financial, Times archives
http://timesofindia.indiatimes.com/India_Inc_says_no_to_CEO_salary_curbs/articleshow/2075120.cms
India Inc says no to CEO salary curbs
NEW DELHI: The Prime Minister’s call to India Inc to trim salaries of top executives has got a thumbs down from industry, even as CPM celebrated it as a validation of its critique of Manmohanomics.
“Salaries cannot be legislated,” said Sunil Bharti Mittal, the just-elected head of the corporate club, the Confederation of Indian Industries.
Singh had on Thursday used CII’s platform to make a pitch for reining in salaries on the ground that they could provoke a backlash.
Inaugurating his term as CII head, Mittal tried hard to rebut the argument implicit in the PM’s statement that companies were favouring their CEOs by lavishing huge salaries on them. Salaries were a product of demand dynamics, the Airtel chief said.
“There is shortage of skill at the top level and more specifically in the service sector, which is why pay packages of senior executives are high,” Mittal said. Anyway, the kind of salary the PM was referring to was far from being the norm in industry and just a handful among the total workforce got it, he added.
But while the CII chief vehemently opposed any kind of legislation to control salaries, he supported the PM’s concern on inequalities. “The PM’s message is to be taken in the right spirit. His concern was in view of the wealth inequality in the country.... It’s the in-your-face expenditure that hurts the have-nots. He meant ostentatious display of wealth should be avoided,” Mittal said.
So did Bernanke. Capitalists fearing a revolution...where have I read that?
India Inc. is a common term used by the media to refer to corporate India.
Mr Singh warned an audience including some of India’s richest tycoons that they could face severe social unrest if they did not curb their spending and do more to bridge the country’s yawning income gap.
“In a country with extreme poverty, industry needs to be moderate in the emolument levels its adopts,” he told the opening of the annual conference of the Confederation of Indian Industry on Thursday.
“Rising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest.”
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But while the CII chief vehemently opposed any kind of legislation to control salaries, he supported the PM’s concern on inequalities. “The PM’s message is to be taken in the right spirit. His concern was in view of the wealth inequality in the country.... It’s the in-your-face expenditure that hurts the have-nots. He meant ostentatious display of wealth should be avoided,” Mittal said.
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Management 101.... and good, balanced, advice from both men.
Good advice that is unlikely to be appreciated by those who most need to hear it, however. “Gilded age” conspicuous consumption is an obsession like many others: easy to recognize and very difficult to curb by those most in its grip.
Matt 13:22 Now he who received seed among the thorns is he who hears the word, and the cares of this world and the deceitfulness of riches choke the word, and he becomes unfruitful.
Prov 10:15 The rich man’s wealth is his strong city: the destruction of the poor is their poverty.
Ps 90:12 So teach us to number our days, That we may gain a heart of wisdom.
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Luke 12:13-21
13 Then one from the crowd said to Him, “Teacher, tell my brother to divide the inheritance with me.”
14 But He said to him, “Man, who made Me a judge or an arbitrator over you?” 15 And He said to them, “Take heed and beware of covetousness, for one’s life does not consist in the abundance of the things he possesses.”
16 Then He spoke a parable to them, saying: “The ground of a certain rich man yielded plentifully. 17 And he thought within himself, saying, ‘What shall I do, since I have no room to store my crops?’ 18 So he said, ‘I will do this: I will pull down my barns and build greater, and there I will store all my crops and my goods. 19 And I will say to my soul, “Soul, you have many goods laid up for many years; take your ease; eat, drink, and be merry.”’ 20 But God said to him, ‘Fool! This night your soul will be required of you; then whose will those things be which you have provided?’
21 “So is he who lays up treasure for himself, and is not rich toward God.”
Dumb...even for a communist to say. How does NOT spending help bridge any 'gap'? The spending of the rich is exactly what distributes wealth. You do or make something the want...like Swedish Meatballs for the weddings....SHAZAM!! I think what the guy must really be saying is deposit it all in the banks, where India's government has first dibs on the capital. or something like that.
As long as the Prime Minister is giving advice and not making law, I don’t have a problem with it. As long as the people he is advising are free to ignore him.
Our home grown socialists, Hillary et al, want to confiscate money from people they consider “rich”.
““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 the seeds of resentment in the minds of the have-nots.””
Does it insult the chefs, entertainers, waiters, janitors, limo drivers, seamstresses, suitmakers, gift sellers, shoe salesmen, flower arrangers, flower growers, farmers, and others whose products and services were purchased for the event?
No - it spreads the money through the entire economy. Supply side... Trickle down... call it what you will.
Socialists are stupid.
Agreed and that all Indians have the opportunity to achieve if they make the correct decisions, apply themselves and catch a lucky break or two. It’s not up to the government to play Robinhood and take from those that choose wisely and give to those who don’t.
Only part of your argument is correct,but the fact that a lot of Indians are spending crazy amounts on weddings seeing some big honcho hold big affair & end up saddled in debt.
The people you mentioned sure benefit,but to how much degree.Some of the bigwigs hire movie stars & dancers to perform at their weddings-these persons & their associates end up earing close to over 50,000USD for a 1 hour performance.How much do the chefs,janitors & others make??They would be very happy if they can make 5,000 USD in 1 year.
“The people you mentioned sure benefit,but to how much degree.Some of the bigwigs hire movie stars & dancers to perform at their weddings-these persons & their associates end up earing close to over 50,000USD for a 1 hour performance.How much do the chefs,janitors & others make??They would be very happy if they can make 5,000 USD in 1 year.”
No wonder your name is Sukhoi-30mki. Your view of economics is basically socialist.
Think of supply and demand - yes, a Bollywood star might earn $50k USD for a 1 hour performance. That is because there are only a few Bollywood stars and they are in high demand. Millions of people can perform, but they won’t be nearly as interesting.
On the other hand, $5000 a year is pretty good in India where many people earn less than a dollar a day such as in rural areas. Supply and demand... there are many millions who can make a decent idli or channa masala or whatever they are serving.
The Bollywood star who earns $50k, what do they do with it? They buy goods and services, moving the money throughout the economy.
I suggest you buy a book on microeconomics. Preferably by Milton Friedman or Thomas Sowell, though Adam Smith’s Wealth of Nations will do just fine, too.
“Agreed and that all Indians have the opportunity to achieve if they make the correct decisions, apply themselves and catch a lucky break or two. It’s not up to the government to play Robinhood and take from those that choose wisely and give to those who don’t.”
That’s what Veerappan tried to do, and look what happened to him :)
(I’m glad they shot that murdering bandit.)
Your argument loses its worth once you start with the namecalling.I’ve read Milton Friedman’s works more than a handful of times.I suggest you familiarise yourself with the economics of marriages esp. in Northern & Western India & how vulnerable persons working in that section of the hospitality sector are.Do you know about the scores of musicians,cooks(not chefs) & domestic helps who are languishing without work because persons are spending more & more on spicing up their weddings hiring a few niche specialists??Do you know about the appalling conditions that such lower end workers live in.FYI,channa masala is out,multi-course global cuisine seems to be the craze.
About the Bollywood stars,do you mean those same people who buy their cosmetics & jewelry from Dubai & London?Who shoot 75% of their movies in Switzerland,Manhattan & Singapore??What employment have they generated,other than allowing the Indian mafia to go legit??????
Your argument loses its worth once you start with the namecalling.I’ve read Milton Friedman’s works more than a handful of times.I suggest you familiarise yourself with the economics of marriages esp. in Northern & Western India & how vulnerable persons working in that section of the hospitality sector are.Do you know about the scores of musicians,cooks(not chefs) & domestic helps who are languishing without work because persons are spending more & more on spicing up their weddings hiring a few niche specialists??Do you know about the appalling conditions that such lower end workers live in.FYI,channa masala is out,multi-course global cuisine seems to be the craze.
About the Bollywood stars,do you mean those same people who buy their cosmetics & jewelry from Dubai & London?Who shoot 75% of their movies in Switzerland,Manhattan & Singapore??What employment have they generated,other than allowing the Indian mafia to go legit??????
Or here is a far better idea.Why don’t you care to spend a few months(not days,but months) esp. from Mid October till mid February,when the marriage season in Northern India is on.You can see for yourself about whether your supply & demand theory works so perfectly or not.
“Your argument loses its worth once you start with the namecalling.”
NO namecalling - just observation. You’re complaining about people who earn money spending it as they will.
“I’ve read Milton Friedman’s works more than a handful of times.I suggest you familiarise yourself with the economics of marriages esp. in Northern & Western India & how vulnerable persons working in that section of the hospitality sector are.”
I do have more than a passing familiarity with the level of abject poverty in India. Of course that level of poverty existed before Bollywood, so i’s tangential to it, not caused by it.
“Do you know about the scores of musicians,cooks(not chefs) & domestic helps who are languishing without work because persons are spending more & more on spicing up their weddings hiring a few niche specialists?”
Sounds like a good opportunity for a smart cook or musician to become a niche specialist, don’t you think? There are a lot of people languishing without work in India. It’s not the fault of people who have extravagant weddings. If anything they help the economy. All the people who attend - they have to get their laundry done. If they’re wealthy, someone drives them in a limo. If not, an autorickshaw. Someone cleans up afterward. Someone grows the food, brings it to market, sells it. Someone grows the flowers, tailors the suits.
“Do you know about the appalling conditions that such lower end workers live in.”
I know well what conditions they live in. Like I said though - this is nothing new for India. Commerce is their way out of it - not restricting how people with more money can spend it!
“About the Bollywood stars,do you mean those same people who buy their cosmetics & jewelry from Dubai & London?”
I didn’t know that the poverty stricken villages were places people could go buy cosmetics or jewelry. Now you want to restrict their access to passports? How about the IT guys who make billions overseas and bring the money back to India? Bollywood sales are also huge outside india, throughout all asia and the middle east for example. Even big in the US where it has a cult following, no to mention the millions of Indians here.
“Who shoot 75% of their movies in Switzerland,Manhattan & Singapore??What employment have they generated,other than allowing the Indian mafia to go legit??????”
Where should they do, bring the cast and hundreds of crew to a small village with no electricity or phones, 3 stinky hole in the ground toilets with no doors, and poop all over the streets and in the river? (See, I do have a familiarity with Indian poverty...)
“Or here is a far better idea.Why don’t you care to spend a few months(not days,but months) esp. from Mid October till mid February,when the marriage season in Northern India is on.You can see for yourself about whether your supply & demand theory works so perfectly or not.”
My fiancee is going there in less than a month to work in a rural hospital in Tamil Nadu, and then backpacking to some other out of the way rural places. Of course that’s south India. I’m going with her next year. I have a business to run here - I can’t spend a few months overseas on some kind of ‘fact finding’ mission to see if what some guy named after a Soviet fighter says is true, when I’m sure it is - other than that it was somehow caused by other people having lavish weddings.
If you think Im the only one complaining,I guess you should look at the editorial & opinion pages of quiet a few Indian papers-many persons from the corporate world themselves supported what the prime minister said.Nobody has a problem with spending-it’s wasteful spending that’s causing the negative vibes here.& the fact that scores of middle class Indians take after them,ruining their lives & those of their families in debt.Why not advocate your line of unrestricted spending-might be very encouraging to them.
Your familiarity with India begins & ends with suiting your arguments-there are scores of high end consumer shops in India,not just the poverty stricken villages filled with poop that you seem obsessed with.Why aren’t the likes of your Bollywood heroes going there????
Smart cooks & musicians need a lot more than spunk to perform at the wedding of an industrial bigwig or actor-so they scrap around hoping for the odd wedding.
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