A day after Prime Minister Manmohan Singh’s no-holds-barred message to the corporate sector maximise profits only within the bounds of decency and greed, the Confederation of Indian Industry's (CII) new president, Sunil Bharti Mittal, said on Friday that salaries of chief executive officers (CEOs) and company promoters cannot be legislated and business profitability cannot be set to limits.
Addressing the media here after taking over the President of CII, Mittal, who has joined Forbes' magazine's list of global billionaires on the strength of the Bharti Airtel-led group he has built, said Indian industry was facing a major shortage of skills in key areas, particularly in certain services sector such as telecommunications and information technology.
"Shortage of skills in key areas at the top level is a serious and genuine problem, specifically in the services industry, which is facing the pressure of high salaries," Mittal said.
“In my own company, among the 12 director-level positions, there are five expatriates," he said, underlining the shortage of skills and the need to pay high salaries to retain talent at key positions.
Mittal, however, hastened to add that there ought to be a correlation between the size of a company and employees’ salaries.
“The Prime Minister’s views are not misplaced. But the cases of high salaries of promoters and senior executives were few,” he said.
He also said that enacting a legislation for such a purpose would not yield positive results. “But these things cannot be legislated," he said.
The Prime Minister, inaugurating CII's annual session on Thursday, asked industrialists to break cartels and abstain from ostentatious consumption and greed in their quest for profit, and warned business that growing income inequalities could lead to social unrest if not addressed by the wealthy.
Singh laid down a ten-point social charter for the companies at the session in a speech peppered with forceful remarks about the responsibility that private enterprises must show to achieve more equitable growth.
"The Prime Minister's message is to be taken in the right spirit. His concern was in view of the wealth inequality in the country... In-your face spending hurts people. He meant ostentatious display of wealth should be avoided," Mittal said.
Mittal said that excessive profitability referred to by the Prime Minister was not a permanent feature.
"Sometimes prices do go up but it is not a permanent feature and ultimately free market forces will prevail. However, industry works for profit and makes investments accordingly," he said.