ponderings & pennings

These are the pitfalls we should have been ready for while rejoicing the "coronation" of an economist as the Prime Miniter of India.

It couldn’t have been worse than his suggestion to cap the remuneration of CEOs of India Inc. It surprises me that he had to suggest this being an economist by himself. If he is doing nothing but mouthing the words of some ma’am then he yet again proved himself to be nothing more than a rubber stamp.

Discounting the above feelings, I don’t understand how this step even if implemented will help the nation. A company, if it starts paying less to its CEO then it is but obvious that with loss of some perks/money the effort from the CEO will go down proportionately (even more than proportionately) and this will in turn affect the net profits earned by the company. With lower profits of the company, the government stands to reduce its tax revenues. So is the PM suggesting that India can do with lower revenues. I agree that there are many other issues involved and not just tax revenues to the CEO packages but then we have other ways to handle the subtle genesis of the issue.

This also prods me to bring to the notice of the PM the issue of abnormal high perks and monetary benefits that are showered on so-called CEOs of the Indian governance - the ministers who are yet to show any tangible profits over the last so many years. Its a surprise that no one talks about a cap on their compensations. Its ironical that when they work they ruin tax-payers money by ways like stalling the proceedings of the Parliament etc.

So, Mr. PM, it’d be nice if the government can set its own house in order before preaching to those who are doing a far better job.