Pinching the wealth of the nation
Part of a Prime Minister’s brief is to play pastor to the nation, and Manmohan Singh has done a decent job of that in his three years in the parish. This is a Prime Minister who has, in his sermons, sang sober hallelujahs to India’s growth story and the sterling role played by our entrepreneurs. So imagine our utter surprise when the same man speaks from the pulpit about the need for big companies to “resist” paying large salaries to their top executives and ‘suggests’ that industry be “moderate in emolument levels” so that socio-economic inequities can be reduced. In one speech, Mr Singh, a prime architect of India’s economic reforms, turns the very notion of meritocracy and enterprise that we have come to value after decades of debilitating socialism on its head. He doesn’t stop there. Mr Singh can’t resist taking a dig at the media and goes on to provide a moral science discourse on how reporting lavish weddings and conspicuous consumption “insults the poverty of the less privileged”. He sounds distressingly like a man whose idea of social bliss is an egalitarian society, never mind if it is uniformly poor. In other words, a pre-reforms India where no one flashes their wealth because there is no wealth to flash. The communists, both outside and inside his own party, not to mention the spectre of the Supreme Soviet, must have nodded approvingly.
The Prime Minister’s moral spiel at the annual session of the Confederation of Indian Industry (CII) is doubly startling. One, he staples his plea to India Inc’s ‘responsibilities’ towards society with the not-so-veiled threat that if industries don’t don the hair shirt, the disparities in income could snowball into social unrest across the country. This is being intellectually dishonest. Two, to lay the blame of economic disparities — and the accompanying social disaffection among the have-nots — squarely at the door of corporates is an easy way of shrugging off the guilt that the Indian State should bear for not implementing real welfare policies for the last 60 years. In fact, private companies have been far better — whether in terms of labour laws, worker benefits or even infrastructural development — than the State which Mr Singh today represents. That is not to say that India Inc. should not do more as part of its corporate responsibility and social obligation. It needs to and it must. But companies are responsible to their shareholders in the same way the State is responsible to its shareholders — the people. More, and firmer, public-private activities are needed to alleviate the economically weak; not an abdication of responsibilities by the State along with hare-brained restrictions on corporates.
Making a fetish out of asceticism has never got India anywhere. Poverty has thrived — not diminished — with artificial caps on private wealth and dampeners on entrepreneurial zeal. Mr Singh, of all people, should know this. We can’t fathom what made him suggest punishing India’s wealth creators. The Prime Minister threw John Maynard Keynes at his CII audience: “...[captains of industry] were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit condition that they consumed very little of it in practice. The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion.” Let us throw John Stuart Mill back at the Prime Minister: “...this Being [who created Man] gave all human faculties that they may be cultivated and unfolded, not rooted out and consumed, and that he takes delight in...every increase in any of their capabilities of comprehensive, of action, or of enjoyment.” So let the good Prime Minister not perilously signal the clock be turned back to an era where to be poor was to be glorious and to make money, a sin.