I support Hon. PM Dr. Manmohanji

For the last coupla weeks or so, there has been intense, mind you, very intense speculation on what Manmohanji meant when he addressed the CII conference with a 10 point agenda. The debate hasn't stopped yet. I was seriously pissed off when I saw two noted columnists(Swaminathan Aiyer and Shobaa De) in the today's Sunday Times voicing their concerns on this issue after weeks of intense debates. Both of the columnists, for whom I have very high regards, have addressed this issue pretty lopsidedly(Nevertheless,the two articles were good and Iyer was spot on in his 10 point agenda to the netas). You can play the blame game upon politicians for social inequality and also ask politicians to restrain themselves before advising the corporates. Certainly any logic driven person would agree with this. 100 % true.

And as a matter of fact PM was addressing a bunch of corporates and not politicians and obviously he can't speak of the restraint in political spending(man, he can't comment on politicians b'coz he has very limited powers in the UPA regime and he's trying to use it for the betterment of the country) and by the way personally Dr Manmohan Singh is known for his modesty and simple lifestyle.

But the question is was Manmohanji spoke something so bad that it has evoked such a response from all quarters?


1 Manmohanji was asked to address the CII conference, which in the first place, was held to discuss the 'inclusive growth' which addresses how should all the people in the country grow? Growth in our country as all of us know is specific to a few sectors. When 6/10 households in our beloved country do not have water in their premises and 1/2 households in rural India, ie the villages don't have electricity, inclusive growth is certainly the most important issue

2 Most of us know that Manmohanji was one of the few people, who have made India, one of the fastest growing economies in the world. He has certainly created the opportunities for a lot of people to become the CEOs of various corporate organisations in India. It is only because of liberalisation that a lot of middle class 21 yr kids today find absolutely no hassles in finding themselves cushy jobs.

3 I'm not talking about the past glories. Think from Manmohanji's perspective. He has certainly pushed India into the high growth trajectory, elevating the status of a lot of middle class Indians, by his liberalisation move. Next thing in his mind should be to elevate the poor class. And that's obviously on the top of his mind. And that's what is achieved by inclusive growth.

4 It was the CII which invited him to address the issue of Inclusive growth and as a world class economist, he came out with his views. The issue of 'conspicuous consumption' and 'Cap on CEO salaries' was just a small part of his entire presentation and not the crux. Don't view him as a prime minister who's addressed the conference. View him as an economist and he's certainly capable of addressing any international conference on such topics even if he were not India's PM, but as one of the best economists living on this planet.

Content of the speech: Flawed?

Let me just get into the crux.

1 A lot of people fail to understand that being a business leader doesn't always mean that one can be a good economist. A country can't be viewed as a firm as such. Business leaders may be good at managing firms but macroeconomics is something different. But no one can deny the effect of macroeconomics on a firm run by a CEO. To put it in simple terms, concept of firm and microeconomics is an open system concept whereas macroeconomics is a closed system.

2 Any macroeconomics expert should have a very very sound understanding of social behavior pattern, political philosophy, moral philosophy, political history and a bit of law. Take Dr. Amartya Sen as an example. He's a Nobel Prize awardee in economics, but he's got a very sound understanding of not only economics but also of all the above mentioned subjects.

3 The study of macroeconomics is complete only if one has a very good understanding of Social behavior pattern and other such subjects mentioned above. But Business specialists who typically run the firms do not need to have such a level of expertise, just a basic understanding is sufficient. The logic is not difficult to decipher: Running a firm depends on macroeconomics and macroeconomics in turn depends on social behavior pattern. So macro economists have to go a level deeper.

4 When there is a growing inequality, there is a social tension and if it breaks out bigger, all of us are gonna lose in the long run. And the advent of media has made events like Abhi-Ash wedding very public just for their TRP. This is just an example. Many such programmes and sops which portray luxury, reach the nook and corner of the country. Just think this way. A small boy in the village sees the TV and regrets the fact that he can't wear good clothing or eat good food. So definitely it'll affect his mind and to make the matters worse media telecast programmes without minding the social impacts. We or for that matter even biz-specialists can't appreciate well, what would happen if a boy watches luxury stuffs and how his mind gets affected. But a person who's good at political and moral philosophy, historic behavior pattern et all can appreciate it well because he'd have read about revolts and what lead to the revolt, the economic impacts of the revolt and how firms were affected by it. So obviously this is a critical issue today and that's what Dr. Singh wanted to address.

5 Coming to the next issue of salaries,Cap on CEO salaries may be not the proper way of putting it. But the point he wanted to make is that the salary levels of all the employees, not only the CEOs, are rising too much when compared to that of the poor people. The gap between the rich and the poor is increasing and something must be done about it. You may ask me why he was very specific about CEO salaries. You might even say that it has political motive. But the same issue of CEO salaries is discussed worldwide including the US, so prolly he referred to the wording -'Cap on CEO salaries' which was an issue in the US,as merely a pointer to drive home his point of how the income disparity is a serious issue worldwide. He prolly wouldn't have meant it.

See we need to address this issue immediately. Only then we can achieve sustainable growth. The rich poor gap is becoming alarmingly wide. And corporates have definitely a greater responsibility in the remedy measures. Not because they are generous, but it is necessary for them in the long run to survive. In other words we call it 'Long Run Profit maximising behavior'!! Perhaps this is why Adam Smith is really fantabulous!!

So let the distinguished columnists like Swaminathan SA Iyer in their columns (his column 'Swaminomics' appears every Sunday in Times of India) , discuss the solutions for bridging this divide rather than criticizing and mocking the PM.


Above all just think about the pains to prepare agendas to address a CII conference. And we stick to a small aspect of it and criticize. Can your regional neta address such a conference? I know for sure that the malaichamys and muthukaruppus of my state don't know what inclusive growth is or prolly what's the growth rate of India is. But come on, they know how to prepare a cuppa Masala Tea.