Opinion - Leader Page Articles

CEOs and the wealth of notions

P. Sainath Gross inequality does far more than breed resentment. It destroys millions of lives, devastates the access of the poor to basic needs, dehumanises both its victims and its votaries, and undermines democracy itself. "THE PRIME Minister wants CEOs to create wealth or the nation. Then he wants the! to ta"e pa# c$ts." That%s a slogan gracing the h$ge hoardings p$t $p &# a M$!&ai newspaper. It%s o'er two wee"s since Man!ohan Singh as"ed the Con ederation o Indian Ind$str#%s ann$al general !eeting "to resist e(cessi'e re!$neration to pro!oters and senior e(ec$ti'es and disco$rage conspic$o$s cons$!ption." )$t the cries o wo$nded crorepatis still rent the air. It !$st intrig$e *r. Singh that the !edia ha'e &een ar !ore hostile than ind$str# itsel . A ter all+ the CII had in'ited hi! to spea" on ,incl$si'e growth.% This is the politicall# correct -argon o o$r ti!es. His speech at the e'ent was as 'anilla as it gets. It &ore no strict$res+ carried no warning. In e ect+ the s$per-rich were told it was o"a# to &e .$ite greed#+ &$t not o&no(io$sl# and conspic$o$sl# greed#. The s$&tle distinction escaped his a$dience and enraged the !edia. The speech drew !ore editorials in a wee" than the s$&-ect o ine.$alit# did all o last #ear. The ront page stories were !ore editorials than news reports. *ailies ran whole pages o "de&ates" on ine.$alit# and CEO pa# pac"ets. Pages with headlines s$ch as "India Inc / India Red In"." Most concl$ded that+ act$all#+ we%re not so &ad a ter all on the ine.$alit# ront. The odd dissenter was p$&lished+ gi'ing the rest o the rant a ocal point and a so t target. The !edia see the!sel'es as the c$tting edge o India%s )ra'e 0ew 1orld. So it was earlier too+ when the )harati#a 2anata Part#-led 0ational *e!ocratic Alliance hogged !assi'e p$&licit# or its India Shining ca!paign. 3ar &e#ond e'en what the# had paid or with co$ntless crores o p$&lic !one#. 3or the !edia+ it was and is a !ission. One which prod$ces that war! and righteo$s glow that onl# the happ# wedding o Ca$se / Co!!erce can. The poll de&acle o 4556 earned $s a &rie respite ro! the !antra. 1ee"s ago+ Mani Shan"ar Ai#ar !ade a ar !ore de'astating speech on the "classes and the !asses." It drew a scathing pict$re o the state o things. The !edia a&sor&ed that !ore cal!l#. A ter all+ Mr. Ai#ar was not the "architect o the re or!s." *r. Singh was+ so the sense o &etra#al still po$rs o$t ro! the tele'ision screens.

One thing stands o$t+ tho$gh. The !ost hated line o the Pri!e Minister%s speech 8apart ro! daring to s$ggest that CEOs !ight s$r'i'e on a ew r$pees less9 was this: "S$ch '$lgarit# ins$lts the po'ert# o the less pri'ileged." That anno#ed the !edia. Sho$ld the ,re or!s% &e derailed &eca$se o the ,resent!ent% o so!e o'er the s$ccess o others; This is the de&ate at its lowest. Ine.$alit# has !an# aces. The "ind we ha'e n$rt$red in the ,re or!% #ears does a lot !ore than "plant seeds o resent!ent in the !inds o the ha'e-nots." It destro#s !illions o li'es+ de'astates the access o the poor to &asic needs+ deh$!anises &oth its 'icti!s and its 'otaries+ and $nder!ines de!ocrac# itsel . It was there earlier+ o co$rse. 1hat%s new is the r$thlessness with which we ha'e engineered its growth these past 7< #ears. This wee"%s &ig news is that M$!&ai has topped Maharashtra%s HSC res$lts with a pass percentage o =>.>=. That sho$ld not s$rprise $s. The !etro%s schools and acilities o$tclass those o other regions. Tr$e+ e'en this ti!e+ the State toppers are not ro! M$!&ai. The# are ro! 1ardha 8in 0agp$r di'ision9 and A!ra'ati. )oth in ?idhar&ha. )$t at 6=.< and <7.5@ per cent+ the o'erall pass percentages o those di'isions are dis!al. The# are wa# &elow the State a'erage o >6.4< per cent. And &oth ha'e ared worse than the# did last #ear. Here%s one reason wh#. ?idhar&ha+ alwa#s electricit# star'ed+ saw 74- to 7=-ho$r power c$ts at the ti!e the children were st$d#ing or their e(a!inations. 8It%s a region where schools re-open wee"s late to a'oid e(posing children to e(cessi'e heat.9 The great !etro o M$!&ai was spared this "power crisis." 8So!e o the well !eaning did write articles on how to &e a good citiAen and $se #o$r air conditioners !ore e icientl#.9 In one esti!ate+ a 7<-!in$te power c$t in M$!&ai co$ld gi'e ?idhar&ha two ho$rs o electricit#. Hal that wo$ld ha'e helped the st$dents with their e(a!inations. 3$rther+ !alls and !$ltiple(es lead M$!&ai%s &iggest power g$AAlers. )$t this is the cit# o 4<+555 o India%s @B+555 dollar !illionaires. 0ot onl# ho!e "to the largest n$!&er o a l$ent indi'id$als+" as an A!erican E(press st$d# p$ts it. )$t also ha'ing "the astest growing a l$ent pop$lation in the world." So the dar"ness is &anished to Aones s$ch as ?idhar&ha C which prod$ces !ore power than the other regions o Maharashtra. Ine.$alit# in the conte(t o growing co!!ercialisation o ed$cation !eans that !illions o &right and talented st$dents are sh$t o$t ro! a &etter $t$re or want o !one#. That r$&s in an old tr$th. Merit D accident o &irth E electricit#. 8And !a#&e a dash o geograph#.9 In health+ a i th o Indians no longer see" an# "ind o !edical treat!ent. )eca$se the# cannot a ord it. In law and -$stice+ each !onth &rings $s a new and sha!e $l e(a!ple o how the law is not an ass &$t a ar !ore !allea&le creat$re. Still+ what o$traged the !edia !ost was: CEO salaries. To$ching the! is "against the spirit o the re or!s." Earlier this #ear+ a progra!!e on an English T? channel as"ed: Has the re or! process largel# a'o$red the rich and corporations; Close to =5 per cent o an a$dience o #o$nger generation corporate e(ec$ti'es answered ,#es.% The anchor%s own ta"e was re'ealing. 1hen one o the t#coons arg$ed or ,incl$si'e growth% she la$ghed and told hi!: "Fo$%re so$nding li"e a politician. That%s the lang$age the# $se."

This ortnight%s de&ate did ha'e its !o!ents. Its highlight: Planning Co!!ission *ep$t# Chair!an Monte" Singh Ahl$walia de ending the Pri!e Minister%s state!ent on tele'ision. Endorsing a call or corporate restraint !$st ha'e &een e!&arrassing or Mr. Ahl$walia. He said that+ er+ well #o$ "now+ ahe!+ the Pri!e Minister did not .$ite reall#+ in his 'iew+ $h+ sa#+ e(actl# what was &eing ascri&ed to hi!. Then he &rightened $p. "It%s an iss$e e'en in A!erica+" he said+ .$ite rightl#+ o o&scene corporate salaries. 1ell+ it%s &een an iss$e there or two decades or !ore. 3i'e #ears &e ore Mr. Ahl$walia st$!&led $pon the de&ate in the Gnited States+ Merrill L#nch+ L$cent Technologies+ Citigro$p+ and AT/ T a(ed o'er H7+555 wor"ers &etween the!. The sa!e #ear+ their o$r CEOs too" ho!e !ore than I7B5 !illion in pa#. 8Pl$s !ore !illions in stoc" options and other sops9. L$cent Technologies in act 8as the New York Daily News pointed o$t9 reported a I7= &illion loss and sac"ed <>+555 wor"ers. Then it ga'e its CEO a I44 !illion pa#o . Manage!ent g$r$ To! Peters long ago s$ggested that CEOs &e called C*Os: that is+ chie destr$ction o icers. )eca$se "#o$ essentiall# get paid or &lowing $p #o$r own &$siness &e ore the co!petition does." In India+ the ILO reports that la&o$r prod$cti'it# shot $p @6 per cent &etween 7HH5 and 4554. )$t real wages in !an$ act$ring ell 44 per cent in the sa!e period. It sees this as "an indication o deterioration in the inco!es and li'elihoods o wor"ers. *espite the increasing e icienc# o their la&o$r." This was also a period when CEO salaries had &eg$n cloc"ing all-ti!e records. E'en now+ top-end co!pensations in India are growing !$ch aster than in the G.S. Meanwhile+ two da#s a ter the Pri!e Minister%s speech+ the !edia hailed the 0ew *awn. The e!ergence o India%s irst trillionaire in Reliance chie M$"esh A!&ani. As one writer p$ts it: "e(pressed as a percentage o pro its+ Indian co!pan# heads are ar a&o'e their glo&al co$nterparts ... 3or e'er# Rs.7 crore earned as pro it+ the Indian CEOs ta"e ho!e Rs.7>+@55." Jlo&al CEOs ta"e ho!e Rs.H+H55. "Jo'ern!ent cannot legislate CEO salaries." That%s a line r$nning thro$gh !ost attac"s on *r. Singh. The# do legislate ta(es+ tho$gh. And also a low-end wage. A&o$t the one thing Ton# )lair can loo" &ac" on witho$t sha!e is his go'ern!ent%s !ini!$! wage law. The Guardian points o$t that as a res$lt o it+ ")ritain%s lowest-paid wor"ers en-o#ed a higher i!pro'e!ent in their standard o li'ing since 455B than those in an# other E$ropean co$ntr#." O'er i'e #ears ago+ Pa$l Kr$g!an+ in a de'astating piece on ine.$alit# in the G.S.+ o$nd it o&scene when a CEO there earned a tho$sand ti!es what an ordinar# wor"er did. 1hat a&o$t $s; Presentl#+ the a'erage pac"age o the top i'e Indian CEOs is aro$nd Rs.7B.< crore. The lowest paid wor"ers in their own co!panies wo$ld earn 7<+55545+555 ti!es less. I we co!pare these top inco!es to those o agric$lt$ral wor"ers+ the gap wo$ld &e B4+555:7 or worse.

*r. Kr$g!an arg$ed that it was not si!pl# econo!ic well-&eing that s$ch le'els o ine.$alit# threatened. It was de!ocrac# itsel . He%s in good co!pan#. *ecades ago+ the architect o a 'er# di erent "ind o re or!s than those *r. Singh represents+ p$t it sharpl#. *r. A!&ed"ar warned that a lac" o econo!ic and social de!ocrac# wo$ld spell doo! or o$r political de!ocrac#. In *r. Kr$g!an%s own nation+ long ago+ 2$stice Lo$is )randeis said the sa!e thing: "1e can ha'e concentrated wealth in the hands o a ew or we can ha'e de!ocrac#+ &$t we cannot ha'e &oth." L Cop#right 4555 - 455> The Hind$ Date:12/06/2007 URL: http://www.thehindu.co /2007/06/12/sto!ies/2007061201"21000.ht