Developmental Issues of India: Should We Do the Root Cause Analysis or Should We Pray for Getting Back Our Senses?

Let us pray for getting back our senses!

Here are some interesting news that are online today which tells about the Indian economic projections:

1. In a global survey 62 % Indian CEOs are reportedly optimistic about the future of their companies for the next 12 months. ( Don't ask why only 12 months!) 

2. India poised to become the fastest growing economy in the world in the next two years- says IMF, the Economic Times report.

Yes, the above reports are very optimistic, but apparently look like vision statements of people who operate from air-conditioned coziness rather than knowing the grass root realities.

The problem is that we hardly understand the dynamics of money and physical work. 

For example, how do we compare the worth of two companies doing business? 

Company-A  has a turn-over of 2000 million rupees and is consistently showing profit for the past few years. Undoubtedly, its stocks are in high demand and are traded many times above the issue price.

Company-B on the other hand has a turn-over 5000 million rupees and is barely showing any profit or at times reporting losses in the balance sheet. Its stocks are not much favored and has a low value.

By simple common sense of present day economic macro analysis, company-A would be the preferred one. 

Now, let us examine these two companies a bit more closely. 

Company-A , though has a good looking and posh air conditioned office with modern office gadgets and decor, the office space is on lease. The company's 200 odd employees do jobs connected with some financial services online. The economic activity the company does arises out of some policy guidelines and special economic situation. There is no guarantee of the situation remaining the same for ever. But if the company goes without work, they have not much to lose.

Company-B on the other hand is a manufacturer of physical goods. It has more than 2000 employees having various skills belonging to various professional disciplines. The raw materials to the company are produced by several ancillary industries. The products of the company also go for industrial consumption. The company has its own land, factory, machinery and such infrastructure. Thus this company can be considered as a core industry and an economic activity booster.

Often, company-B would be seen to move towards more and more unfavorable conditions including getting an incompetent management team that would eventually make it to close down its operations. That causes painful miseries to the 2000 families directly and a dent in the country's economy indirectly.

In olden days, governmental authorities used to be more sensitive to such issues and would have intervened at the right time to prevent such economic mishaps. Of late, in the so-called liberalized economy, governmental authorities are seen as shying away from executing their responsibilities lest they may be accused as partisan.

As I have written in this forum many times, government has a right and a responsibility to intervene in the affairs of any corporate business entity when it is faced with situations where employment and governmental income by way of taxes are affected or likely to be affected.

The ultimate aim for any government is to ensure welfare of its people and employment should be one of the first priorities under citizens' welfare. If the citizens do not have income, no country could progress. So, income of citizens should be the first priority of any progressive nation and its leadership.

Leader of a massive BPL population is nothing of a big achievement! Power and prosperity of the nation vest with the people. If the people are poor and pathetic, the nation as a whole too would be of that type. Strikingly rich individuals of such nations should not be in a position to raise their heads in pride if they have any consciousness left within them!

India is a nation of predominantly income-less people, with only about 3 % of the people officially paying direct income tax as per government reports. Even in this nearly 90% are in the income range of  $ 3000-8000 per year. A little over 42000 people in the whole of India are officially reported with an income exceeding $ 160,000/- in a year. But people having wealth in millions may be much more considering the high levels of black money, corruption and under reporting of wealth.

But yet it is a shameful condition. There is nothing that common Indians could take pride of in such a situation. The unemployment and under employment situations are alarmingly growing with no one having any solutions. Even those employed are hardly with any decent income that could cause any boost in the Indian market to generate more employment.

In India no one seems to be bothered about the situation. All seem to be pretty well satisfied with all the problems. They move as if in good sedation that they feel no pains ever!

A young man sent this famous Napoleon quote to me that reflected the anguish and anxiety that only a negligible number of people in India realize:

" The world suffers a lot not because of the violence of the bad people, but because of the silence of the good people!"

Is India listening? I doubt. 

Should we worry about the walking dead bodies of India any more? I do not know. I too am becoming one of that!

So how to do the root cause analysis of India when the majority feel no pains?

I could have done it to some extent. But there is no one to see and act on my analysis.

All around me appear as senseless. 

Soon, my own ability would vanish.

I too would become a walking dead body, sedated , senseless and feeling no pains!

Perhaps in the bliss of ignorance!

See how infectious this sedation is!

I started with something and ended with this sedated philosophy!

But it's okay because no one is going to read this and react.

If possible, let us pray to God for giving back our senses!

Why Do Malayalees Keep Preferring Padmanabha Dasa's Ten Chakrams?

Yesterday evening while having a usual pleasantry talk between me and my daughter over the cell phone, the issue of school admission for my grand daughter got in to our talks. And that initiated a kind of debate between us which soon was progressing towards an agitated argument that I skillfully put an end to our talks and said good night to her.

My book has taught me why I should not argue more to prove my point lest the truth what I want to convey becomes degraded to the status of an untruth.

Before I go further, it would be prudent to give some background of the issue with my readers.

My daughter, her husband and their five year old child are now in New Delhi. My daughter, who is an MBA had been working as an executive for the past few years before she finally decided to become a housewife to look after her child. Ever since, her most important passion and devotion in life is the upbringing of her child. She would go to any extent to accomplish that, just as any other urbanized middle class Indians. She and her husband want their child to get the best possible education. The only difficulty, as I see it, is their lack of clarity with regard to what they consider as the best education! No doubt, here too, they are no exceptions. The majority of urban or suburban middle class Indian parents now possess this mindset which is the bane of the Indian society, in my humble opinion. They are too willing to be exploited by the clever education entrepreneurs and so-called educationists of India who keep subverting the age old system of education for their own benefits. The aspiration for giving the child the best education is no sin. The definition of 'best education' is the real problem!

So, they have already spend a good fortune to get their child admitted in to one public school in the national capital region in the nursery level. Like all others like them, they have been now brainwashed to believe that spending on education for their child is the best thing that they can do for their child.

The Impressive Gates of a Typical 

Saintly Public School in India 

So, if the schools harass them, they are not much perturbed or they tolerate that without any complaints. 

If the schools charge 150,000 for a nursery level admission, they do not feel it as an exploitation! 

After all how can the schools give good and elite education if they charge only peanuts as fees? They argue! 

They are not disturbed and overtaxed when these schools burden them with heavy home works for the parents (mostly to be taken by the mothers!) and the kids, whose brains and bodies are just in the initial stages of development. For that matter, I have heard about other over enthusiastic young parents (again, mostly the young mothers!) who are too willing to get in to a cesarean to be performed on them to get the child delivered at the most appropriate zodiac time in the hope that their child would become a super human genius at some later stage!

My daughter fortunately understood these things very well. But her problem was the lack of mental strength to resist such evils that are slowly destroying the society in the ways that are never discernible to most of such parents. How could she be the odd woman when the whole society moves in one direction?

Now her worries and anxieties are mounting as her husband has determined to move to Chennai from Delhi to take up a better career there. But the Chennai school authorities are no saints any more. They would not even talk to them unless they are prepared to shell out a huge fortune to get her child a primary class one admission there. The schools bearing the names of the Christian saints are in the forefront now to prove the real meaning of sainthood to all those saint seeking people of India! And saintly schools have mushroomed in large numbers in all nooks and corners of India in the recent times with more and more people are willing to get their children educated there at whatever costs!

I told her to read this recent article that has come in the Outlook magazine online edition recently where the learned author has worked out the present value of the cost of educating your child in India now. 

The author has worked it out at Rs. 42 million for an average education spanning about 22 years in any average saintly schools or similar followed by any average kind of private engineering and management institutes of India. 

If this sum is handed over to the young man or lady after 22 years as a fixed deposit in the bank, it would fetch the young one an interest of nearly Rs.300,000 ($ 5000/-) per month. That is the average annual salary now for any fresh MBA in India who is fortunate to get a job!

If the child is allowed to study in the most humble and inexpensive government owned education system, not only this money would come handy, but also the child would learn things in the most realistic manner that would enable him or her to take up real challenges of life in a better way, the author argues. 

I agree with him fully, because I myself have undergone such an education system and it has given me the outstanding capabilities that I consider as my strength. There were a few among my time who had gone through the so-called elite public school education system imitating the Doon School or other such schools which existed as elite schools in India during the British Raj. No doubt, some of their alumni  have matured up as elitists who are generally considered as having good education. Perhaps they have been good in reciting Shakespearean poetry and might have climbed up the success ladders of professional career due to their better accessibility to receive favors and their connections! But many of them do lack common sense and the real human understanding of life gained from real human experiences!

But my daughter would not agree with me. Neither do any one like her. My children would also not agree the way I myself proceeded to educate them. I stuck to my convictions to the extent possible. I have been always against mushrooming elitist public schools  which I firmly believed as agents that destroyed the social fabric of the Indian society in a subtle manner. These schools caused many children to get developed as individuals with some robotic characteristics, eliminating their natural instincts of creativity and free thoughts!

I am not against private unaided schools or unaided educational institutions with good infrastructural facilities. But education as it stands today is a declared non-profit service in India. And if it is so, it has to remain that way in practice as well. It should not become a clandestine exploitation service for the ignorant society at large!

It should be a mandatory requirement for all educational institutions to publish their income expenditure statements and they should not be allowed to accumulate and divert their excess incomes. They should prove that they are non-profit organizations in practice, if they are registered under that non-profit society umbrella.

On the other hands, the government should allow education entrepreneurs to set up education shops for profit for satisfying the rich and the elites in the society. Let them take any amount of fees that their clients can afford to pay. But it should be a declared policy and not a clandestine arrangement. 

The problem now is of hoodwinking. Some educational institutions hoodwink the gullible parents to believe that they provide the elitist education for ensuring sure shot success of their children. The gullible middle class are forced to believe that the success of the elitist children with parental clicks and connections are the real educational contributions of these so called institutions. Many such institutions are functioning in India in the name of saints and gods, declared as charitable or religious organizations for educational service without any profit making desires whatsoever. But as of now, the reality is some thing very different!

To prove that their education is the best, these educational institutions adopt all kinds of tricks in their arsenal. First they screen the children and the parents in the name of various admission tests. 

They achieve a two fold gain in this process. Firstly, they get the children of better IQs or children of over ambitious parents who are too willing to do any thing to get good marks for their children. Secondly, this ensures better results in the examinations that is the net result of the parents' hard work and the children's better IQ. In this process they screen out all children with any perceivable lack of privileges and showcase the better results as their own achievement. This in turn  ensures a steady stream of parents flocking to such institutions year after year, boosting their financials.

Now what happens in this process? All underprivileged children (underprivileged physically, financially or socially) are naturally denied the opportunity of any reasonable education due to the eagerness of the such schools (read the individuals who manage them!) to maintain their market value. The eagerness in making market value naturally involves creating artificial problems in admissions and troubling the young parents in many ways.

The principals of these kinds of schools have become management agents and not any real and respectable teachers. The teachers have become exploited and overworked individuals who no more have the capacity and ability to be termed as teachers in the real sense! They have downgraded themselves to the status of 'education employees' (शिक्षा कर्मी ) instead of becoming the real and respectable gurus or master guides to their children.

There could be exceptions here and there. But in general, things are moving in a direction that is causing a fast deterioration of the status of the teachers, both in the private and in the government funded institutions, for different reasons!

And what is the final outcome? The inherently good students get screened to be exported to foreign countries to become a generation of second class citizens there in the coming future. Another lot becomes improperly educated ones with distorted moral values to become slavish future citizens of India with no enthusiasm for entrepreneurship. Again, you should excuse me for the generalization!

The majority parents want their grown up children to become employees in some foreign nations or of the government or some other public organizations.  

Middle class parents of India normally do not encourage their children to become self employed or to become entrepreneurs. They want them to become salaried persons of any company or the government at any cost. They are not willing to take any lessons from the successful businessmen and women of India who in the recent past have become successful wealth creators and employment creators. Excepting some, a good majority try to kill any such aspirations of their children! And the Indian education system does not help to improve this mindset of the people in any way.

And job generation is a big problem for a country full of average and non-enterprising minds! The number of employment creators keeps reducing with this kind of a scenario that prevails in India now! India does have immense potentials for employment creation. But the non-enterprising minds of the people do not allow it to happen. The governmental attitudes also create much difficulty.

In my home state Kerala, getting a job of the government (सरकारी नौकरी ) of the king was once upon a time considered as the biggest achievement of any person. The erstwhile kings of Travancore kingdom had the title Padmanabhadasa (പത്മനാഭ ദാസന്‍) . The travancore currency used to the rupee with the chakrams (ചക്രം) and Kashu ( കാശ്) as the coins. A government servant getting ten chakrams monthly was considered as having a higher status in the society and was commonly titled as : Padmanabha dasante patthu chakram pattunnavan. (പത്മനാഭ ദാസന്റെ പത്തു ചക്രം പറ്റുന്നവന്‍) which literally meant the person drawing ten chakrams from the king's treasury in a month as salary. Such a person was given a higher status in society than a trader or farmer who made ten times or more that amount in a month! This was because the government servant, though having a lower income, was having a higher level of education than his money making fellows in general in the past. The respect came from the educational status and not from the wealth status. This was indeed a good thing initially which enhanced the aspiration for education among the people. But the difficulty arose with the people refusing to change with the times!

In reality, this mind set is not limited to the Kerala people alone, but is more or less common with most of the middle class people of many Indian states. Punjab, Haryana, Gujarat and Tamil Nadu could be some exceptions! 

Besides, this mindset caused another problem. The Indian people-the majority of them- are not prepared to honor a person who makes a decent living by self employment or by business. A person who has become successful in business secretly becomes one envied and the envy often got expressed in private by the people calling him some words which meant illiterate fool (अन पढ़ गवार)! Naukary ( नौकरी) or employment and a monthly salary continued as a status symbol among the middle class people of India even now. The status as a salaried employee is perceived as less risky and easy even when the situation has changed much from the olden days!

In such a situation, education has been considered as a tool not for gaining knowledge and culture, but a passport for getting a monthly salary earning employment! 

The educational degree certificates became more important than what has been actually learnt! When the degrees became more and more accessible, people began to look for educational certificates that have some exclusivity in them that could give them some additional status value!

The Indian education system has done hardly anything to change the mindset of the Indian people. On the other hand it has been doing  much to enhance this mindset in the Indian people.

And this is the real curse of the Indian society. If India is not making progress in all fronts simultaneously, it is because of its faulty education system. 

India needs an education system that does not cause further divisions in the already divided society on the basis of education based on any pseudo status. There should be a social awareness campaign that would break the false thoughts of the people and encourage them to view all educational institutions equally. All media efforts to promote some educational institutions as the best or having some higher rating should be shunned while constant efforts are done to improve the standards of all educational institutions and schools on a consistent manner.

Parents having the strength of mind and will power should come forward to promote the government run schools and institutions by sending their wards to such schools and institutions as far as possible.

The unholy alliance between some private companies and some professional institutions in selection and recruitment should stop.

Last but not the least, the educational expenses in the country should be brought under control by decisive actions. No educational institute or school declared as non-profit institutions should be allowed to charge unjustified fees that are not affordable to the average Indian.

The government should maintain subsidized education to the meritorious students who study in the government run institutions such as the IITs, NITs and the IIMs. There is no justification for them to charge hefty fees like the private institutions. 

Organizations should be encouraged to sponsor meritorious students with employment guarantees or with merit cum means scholarships.

All professional institutes or the government should give the data regarding the percentage of people who are employed out of the total pass outs so that the parents could take well informed decisions on spending money and time for any particular professional course. 

As land is becoming scarce to open future educational institutions, government should encourage opening large fully residential campuses in remote rural areas instead of allowing them to be opened in urban areas. The best successful example in India in this regard is the Lovely Professional University in Punjab state.

While higher educational facilities have improved much, the school education system has not. It is indeed a pathetic sight with our tiny ones and their guardians taking all the toils in the name of education. We need to learn much from the developed nations.

That is my perception, whether you agree or not. 

But I do welcome your views both in support and against.

Progressive Ideas for Creating More Jobs and More Income for Governments that Care!

Many of you might have come across this Chinese proverb: ' Give me a fish, I will eat for a day; teach me to fish, I will eat for the life time!'

Have you really understood the meaning?

Many of our philanthropy even now work on the principles of the first part of the above proverb. We try to help others by giving them a fish or some money or some other such thing  that they take it , consume it and fall back to the level that they were earlier. We do not try to create a situation wherein those whom we help do not fall back to the situation they were earlier. Simply put, we simply do not care to facilitate people to live a meaningful life of their own!

Many governments do the same thing. My country, India is a typical example. The Indian government reportedly spend or reported as being spent a good part of its earnings to give subsidies to the poor! They try to distribute subsidized food, LPG, diesel, kerosene, electricity, water, housing, etc by making these things a few rupees cheaper for the people who are not able to earn an income above some prescribed minimum levels. 

Let us find how it goes by some examples. Suppose that the electricity production cost as per the prevailing inputs is some thing around Rs.4 per KWh or unit. Suppose that the government make a scheme by which they are giving a subsidy of Rs.1 per every unit consumed by a house hold which is declared as low income whose electricity consumption is only about 30 units in a month or 360 units in a year. India perhaps has over 100 million of such houses. So the one rupee subsidy means a whopping 360x100x1= 36000 million rupees per year. Effectively the poor people got a benefit of 360 rupees per year or 1 rupee per day. It is less than the money you normally give to a beggar. Perhaps some  beggars might even abuse you if you do that.

But imagine the great money the government lost. They could have used the money for doing some great and useful work such as making some hospitals run better, making some existing roads well maintained, etc etc.

It is just an example. These subsidies do not make any impact in the life of any of the beneficiaries. Perhaps it helps the government officers and staff to adopt corrupt practices and corner a big chunk of that money for themselves. Perhaps some politicians in power also might get some of it from the officials by doing some arm-twisting tactics!

Same is the case with all the other subsidies. India is indeed a country of subsidies. It is the best and the easiest method by which the government can waste the governmental income. Giving a rupee each to thousands of beggars really does not require much effort! And it is also the best method by which public money could be spend without the auditors taking note of any irregularities!

Instead of giving the people a fish for a day, it would have been much better for the country to enable the people to fish. That is enabling the people to fetch for themselves by providing opportunities for them to fish. In other words, it means creating opportunities for people to get meaningful and remunerative employments or jobs for themselves that they no more require the peanuts given by the government as subsidies!

But creating opportunities for jobs is not as easy as giving alms and escaping from the greater responsibilities. For that the first and foremost requirement is to have a government that really cares for the people. You need a government made of matured and visionary leaders who could drive the governmental systems to perform.

Such governments would make laws and rules and ensure such rules actually work in facilitating the country to progress in such a way that unemployment levels keep declining year after year.

If the unemployment levels keep increasing, that merely shows that the government is ineffective and useless. It is a direct indication of a careless and non-performing government.

Now the question is whether it is possible for a government to enhance employment opportunities without it actually getting bankrupt? In my opinion, it is possible. Let us see how a government would move ahead in this case and what are the various options that the government could attempt.

Step No.1 : Government should spell out its policy of plans clearly with a time bound manner. If privatization is a policy, government should declare the list of businesses and services which are not to be done by the government. 

Step No.2 : Government should stop all subsidies and the money so saved should be distributed for existing and new ventures to improve government services and functions. If more people are required to be employed for this it should be done without hesitation. Money may also be given to private enterprises as grants for developing systems where the activities cannot sustain economically initially. For example, government may give subsidy to start new air routes, rail routes, bus routes etc where there is not enough remunerative traffic initially till such times the volumes of business become sustainable.

Step No.3: Government should consider lower corporate income tax and other tax concessions to all companies who keep growing with regard to direct employment with individual employee incomes with taxable incomes. Companies who use their surplus incomes to idle or used to acquire assets and employment abroad should be taxed at higher rates.

Step No.4 : Companies that earn export incomes by exporting locally manufactured items should be taxed at lower rates. However, those companies which export ores and minerals should not be considered for this benefit.

Step No.5: Incomes and profits out of educational services and agricultural activities above a minimum limit should be made taxable. Lands which are kept non productive should be levied penal taxes or should be made liable for take over by the government.

Step No.6: Substantial incentives to be provided for industries and businesses to set up offices and facilities in smaller cities. Unsustainable growth of metros should be prevented.

Step No.7: Corporate expenditure towards Research and Development, import substitution efforts, environmental management and workmen safety should be tax free provided the companies substantiate growth in these areas by employment creation. 

Step No.8 : Laws should be made that would allow real estate development for rental purposes. Real estate developers should be allowed to establish estate management companies.

Step No.9 : Law should be made to make the private hospitals to provide mandatory and time bound medical reports to patients and their medical insurance companies. It should be mandatory for the hospitals and doctors who provide medical services for a fee, to give such reports with proper bills which should enhance employment opportunities.

Step No.10: All government services such as land records, property registration, national identity, voter id, vehicle registration, licencing, company registration, policing, judicial services, infrastructure, etc should be enhanced with the involvement of private participation. Job creation data in these areas should also be maintained. There should also be a national job safety fund similar to the national pension fund, which provide subsistence allowances to its members during the time they become jobless. 

There are hundreds of such things that the government could do if they are really caring for the people!

And it is always to be remembered that more employment in the country means more income to the government. More income to the government means more effective its performance.

So more than any thing else, the first priority of any progressive government should be to generate jobs. Not merely the jobs that provide peanut incomes, but jobs that provide decent incomes!

Out of many parameters to judge, job generation should be the first criteria to assess the performance of any government!

[You may also read about enhancing employment in India]

   

Career Opportunities and Salaries in Post Liberalization Era in India!

India had been a country which followed the socialistic pattern of economy ever since it got independence way back in 1947 till its economy got partially Americanized some time in the Nineteen Nineties. The period before 1990's is called the pre-liberalization era and that afterwards till date could be called the confused era of liberalization.

In the pre-liberalization era of administered socialism, the salaries of all employed people in India were governed by certain limits mandated by governmental directives. No person in India was allowed to draw a salary more than what the President of India got in those days. Rs.10,000/- per month was that sacrosanct figure. In those days it was also mandatory for the government and the private sector companies to publicly announce the details of salaries that they paid to their respective employees.

All employment advertisements from the government and the private organizations routinely announced salient details of the salaries. It was easy for any one to actually know how much an employed person legitimately made as salary. What was not known to the general public was the legal income of businessmen and the illegal income of salaried people especially those employed by the governments.

One of the remarkable achievement of the government of India in the post liberalization period was the removal of the sacrosanct limit of salary for the private sector. I consider this event remarkable because this was done by the bureaucrats of India without raising much protest as their own salary remained lower and limited.

The liberalized government also allowed even loss making private company boards to fix limitless salaries for some of the key members of their own boards, a much liberal rule that allowed many small companies getting drained of their initial and working capitals too soon to become non-existential. 

Post the so-called Y2K digital confusion of year 2000, the software and IT enabled companies of India got enormous opportunities to get dollar remuneration from the USA due to the high IT-outsourcing trend that this country adopted. This enabled many Indian companies who earned their incomes from the dollar economies to pay higher salaries to their Indian employees. 

Then developed the age of private industry opportunism and favoritism in the guise of market forces. As the government did not enforce any thing with regard to the salaries of private sector employees, the initial euphoria of high salaries in private sector soon died out with the majority of private sector employees earning much less while a few of their top favorite managers earned incomes disproportionate to their real contributions. The Indian private sector has degraded as an organized system of exploited managers as many of the white collar private employees are designated as officers or managers without any collective bargaining power. Besides, the private sector pay have been becoming more and more secretive as the employees seldom realized the pay and perks of their colleagues and seniors. 

As such a few of the Indian private sector began to mimic the elite corporations of the USA and such other developed nations where salaries are determined by the educational elitism or educational branding of their managers rather than their actual worth and contribution to the company. Some board level and below board level managers got the opportunity to draw salaries unimaginable by many in the world while the majority of their employees slogged for their respective companies to keep them going without getting even a minor fraction of such high salaries. However, a good majority of Indian private sector in the manufacturing and production fields struggled hard to make income and to pay even some comfortable salaries to their employees and managers as they were all required to play in an uneven ground.

In the mean while, the government officers and those in the government got the opportunity to compare themselves with their elitist private sector companies. The consecutive pay commissions began to take some cue from the private sector average remunerations and began to fix the government officer's salaries. Since this was mostly on the basis of some average, the top government officials could not earn exorbitant salaries. However they have done many other things to compensate their so-called low salaries. Now many of them fly quite often to foreign lands, travel in chauffeur driven luxury cars, have government paid servants at home and office and have many comforts and facilities that their counterparts in private industry do not have. As they are the administrators, executors and interpreters of rules and policies, private industry big wigs often Que up to meet them which indirectly provide many benefits. 

Governments-both central and states- own many public sector companies. Some of them are large and key economic drivers and contribute significantly for the economic well being of the country. A few of such companies had been privatized in the past with the government selling of the majority stake. However, a large number still remains with government as the majority stake holder. Such companies have government nominated boards but are actually run by company officials and managers who are generally recruited by the concerned company. They are called the PSU officers and managers. The PSU officers are deemed public servants with all the responsibilities of public servants, but with hardly any defined authority. They have been a disadvantageous group with regard to their salaries and perks for the past many decades. Only in the recent past, their salary scales have become comparable to that of their counter parts in the government. However, excepting a few, the majority of them are never given any opportunity to prove their skills and professional competence. As their career advances, most of them degrade as 'frogs in the well' due to various reasons which could be a topic of research for any one interested to find the truths. However, the public sector had been the poaching ground for experienced professionals for the growing private sector initially.

As the governments could not take any decisions regarding the future of the public sector companies with regard to the question of they be privatized or not, the public sector companies of India suffered much with regard to their succession planning . As a result, there have been practically no recruitment of officers and workmen in the PSUs for the last several years. Many PSUs now have very senior officials drawing secretary level salaries waiting for their retirement in a couple of years and working too independently. They have no subordinates whatsoever under them. PSUs of yester years which used to simmer with many fold economic activities in the past with thousands of employees have closed down many of their activity centers and losing their collective experience and expertise. Many of them are just waiting to be closed down as their experienced people are getting reduced in numbers with time. When all around the world governments are trying hard to generate employment to their citizens, India with its highest unemployment levels, is undetermined about the future course of actions with regard to the huge industrial infrastructure it had created in the past in the public sector.

Now coming back to the salaries of officers and managers of India. It is difficult now to get clear idea about this. But with some research I am giving some idea about the salary and perks of officers and managers working in India in private sector, public sector and government (The salaries given are approx gross p.a) :

Category                Indian Private Sector     Indian Public Sector   Indian Central Govt 

                    

Entry Level Officer          Rs.0.2-0.6 Million      Rs.0.4-0.5 M         Rs.0.3-0.4 M    

(1-7 yrs)

Entry Level Mgt              Rs.0.5-1.5 Million          -Do-                         -Do-

(1-7 yrs)

Middle/Sr Mgt                         -Do-                 Rs.0.8-1.0 M        Rs.0.8-1.0 M

(7-12 yrs)

General Mgt                    Rs.1-5 Million            Rs.1.5-2.5 M        Rs.1.5-2.0 M

(12-25 yrs)

Top Mgt                        Rs.2.0-20 Million        Rs.2.5-3.5 M         Rs. 2.5-3.0 M

(15-35 Yrs)

The career growth in central government is smooth and steady with seniority playing the major factor. For top postings political patronage is essential. 

In the PSU's both seniority, luck and mentoring by seniors do the magic of career growth up to general management levels. Bureaucratic and political mentoring are important for CEO levels and board level postings. Salaries are a bit better for the officers and managers of large central PSUs. However, they have comparatively not much opportunities for proving their abilities. Their public image and status is also not very charming except for some top management positions.

The pay, perks and facilities of private sector officer and  management career depend on the type and size of industry coupled with the mindset of its management board or promoters. The variations are too high. While some get extremely high salaries and perks, a good majority are underpaid when compared to their work loads. The private sector job is secure only when it is doing well financially. The internal politics in some private companies are too high that people with a straight forward mind might find it too difficult to survive. Hence, most private companies have a high attrition rate. Since the government has not yet openly allowed the hire-and-fire policy, many companies resort to retrenchments in a clandestine manner. Indian private companies are yet to learn the benefits of retaining their managers! While a few managers of Indian private companies are able to get pay and perks many times more than their counter parts in the PSUs and government, there are also millions of them without ever enjoying such benefits. It is also common that the promoters appoint themselves to key positions with extremely high salaries which professional managers cannot even dream of.

Except for the civil services of the government, there is no regular intake of officers either for the Indian PSU and private sector. The recruitment in both private industry and the Indian PSUs are done with no long term vision or planning. At entry level, either they recruit in large numbers or refrain from it for years together. As a result, the career growth and experience opportunities in many private and PSU companies are not so motivating for many of their managers.

In the government, there is a periodic system called the Pay Commission to revise the salaries of the central government officers. In the Central PSU's such an arrangement may or may not be adopted. In the private sector such a thing is practically absent. Unlike the private sector, reservations play and important role for the selection and promotions in the government and PSU jobs.

Government and PSU jobs may not give much satisfaction to one's job due to many factors. High individual performance and competency may sometimes cause career shocks. However, in the private sector, individual performance and competency are mostly recognized and rewarded. 

In the overall analysis, as things stand now, private companies of good track record provide the best career options and job satisfaction. The least of it as of now could be in the PSUs.  

Land Reforms: Some thing Most Important for India to Progress!

Some time ago, I wrote a blog article about the poor land owners' agitation in Odisha State of India against an ambitious private integrated steel plant (ISP) project promoted by the South Korean steel major POSCO with the active support of the state government. 

Post liberalization, the only state which might have implemented large scale private industrial projects in record time perhaps is Gujarat under the chief minister-ship of Shri Narendra Modi who is shortly to take the mantle of Indian government as the new Prime Minister. World renowned companies such as Reliance Industries or Adani Group  would not have become a reality without enough land to set up their large industrial manufacturing and service facilities.

Unfortunately, Asian countries such as India with their below average human development indices, have been markedly behind in effecting land reforms. This Wikipedia article gives an overview of land reforms in major continents in the recent past. 

In India, land reforms have not been in the agenda of the national government since its independence. Land reforms have been left voluntarily to the state governments. Only two states, West Bengal and Kerala, tried to do some thing regarding it during their initial years of existence. Later on, no political party got enough strength and wisdom to do some thing in this connection for the general good of all people. 

Just before its exit from power, the outgoing central government of India in 2013 enacted a law which is known as  The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013  [Get the pdf copy of the Act Here!] This law has now replaced the previous Land Acquisition Act of 1894 which has been a bone of contention between the land owners, the governments and the industry for many years in the recent years due to the manner in which the government authorities operated it. 

While the old law has given too much power to the government officials and had been considered as anti landowner,  the new law is believed to be anti industry. The new law perhaps burdens the private industry with too high costs towards land procurement. The new law apparently provides for high compensation for the land owners. However, it does not ensure future protection of a land owner who becomes landless when his land has been taken over for some industry or development project.

When a land owner's land is taken over for any project, he should not only get a fair compensation, but also get fair protection to live with dignity. All land owners whose houses have been taken over together with the land should be provided with decent housing before his property is physically taken possession by the project authority for whom the land is acquired. They should also be ensured of reasonable and steady future incomes as a compensation for disturbance of their traditional living.

On the other hand, it should also be necessary to protect the industry from incurring heavy initial costs on investment towards acquisition of land. With heavy land costs, many projects might become techno economically non-viable. On the other hand, large projects enhance overall economic activities in its vicinity. Many times it has been seen that when large projects come up and stabilize, the land costs in and around the project go up due to higher commercial opportunities.

This creates a peculiar situation of disadvantage for the people whose lands have been taken over at prevailing market rates. For example, in the rural areas of India where there is no activity other than rural agriculture, the land costs are low to the tune of say, Rs.10 per sq.ft. In the near vicinity of a large commercial project, the cost could be around Rs.200 per sq.ft or even as high as Rs.1000 per sq ft or more. 

Thus, the person whose land is acquired would feel as cheated even when he gets a price of 3 to 5 times more than the market rates due to the probability of the land prices shooting up many times more in the vicinity of any large project once the project becomes commercially operational. Such a situation often causes some people becoming reluctant to part with their land even when they are offered much higher price than the current market rates.

In the previous law, the government forcefully captured the land for any project declared as 'public interest' and paying the affected people prices as decided by them to be paid at the whims and fancies of the officials concerned. The new law is made to help the land owners, but its efficacy is yet to be seen. On the other hand many private entrepreneurs are not so happy about the new provisions of the land acquisition law.

Another problem that arises for any commercial or infrastructural project requiring land is the complex and vague rules that have emerged under the environmental protection acts and rules. Vague laws and rules give enough room for whims and fancies of some authorized persons to play havoc and unending litigation. No business man would like to land in to such complications under normal circumstances! A typical example of this type of a problem is the environmental definitions that are applied to the sloping lands of the western ghats of Kerala while similar situations in states like Himachal Pradesh are dealt with different yardsticks! Obviously, the definitions and yardsticks change from person to person!

The question is how India tackles such problems? As the PM designate Mr Narendra Modi keep telling: "Less government, more (better) governance" The idea is great, but the vast lot of people with high ambitions for getting a slot in some 'offices of profits' would not allow such a thing to happen. It can happen when people become honestly interested in doing good for the people and not for themselves!

So, land reforms in India is not difficult to be achieved, provided the people of India, high and low, are willing to keep the nation in front than their own individual priorities. 

Again the first principle to be remembered for all land acquisition is this: The individual land owner's willingness to part with his land possession is to be respected. The land owner should be treated with dignity. The government has to ensure that the land owner does not become landless and homeless when his or her land is taken over. Not only they are paid reasonably well for their lands, a portion of the land acquired should be utilized for creating a well planned and well designed housing colony for the displaced land owners. This should be in addition to the monetary remuneration paid.

All government officials involved with land acquisition should be sensitized by proper training so that they do their work efficiently in a time bound manner with out antagonizing the people. Concerned laws need to be amended if required. While laws are drafted, the government should also check the clauses with regard to their compatibility for good governance. The practice of passing laws for the sake of it should stop.

These are not difficult for any government if the people of the government are great visionaries and true leaders!

In any case, land reforms in the positive manner on an urgent manner is what India needs now for progress and development. The latter again should be for ensuring enhanced employment to the Indian youths and not for unjustified accumulation of wealth in the hands of a few.

What do you think? 

Enhancing Employment in India Should Be the First Priority for Indian Politicians!

What should we Indians expect from our successful political leaders who chance to become our heads of governmental functions in our central and state governments?

How are we going to evaluate their performances?

In an election year, how would we decide whom to vote? There are so many candidates forced on us by the numerous political parties all with highly ambitious chiefs who are interested in getting in to the seats of political power and governance.

They are spending millions and millions of rupees from their individual and collective coffers to reach out to the Indian voters. All parties get the money to spend on their party leaders and for election propaganda by what is known as donations from the Indian people or the Indian business organizations who make money by various economic activities.

So the circle is like this. The individuals gain money by doing various economic activities. Some of them get paid for their work as employees of some organizations of people formed for doing making profits from various economic activities. These economic activities are numerous. Any activity of human beings which is carried out for some cash benefit is an economic activity. 

So activities related to agriculture, mining, production, manufacturing, transport, communication, entertainment, health, sports, education, administration and governance, insurance, accounting, auditing, policing, politics, law making, law practice, tax collection and administration,  research and development, software development, quality control, etc, and even religious activity are all economic activities. Some of these are economic activities directly involving production of goods and materials while a large number of other activities involve some kind of service. In short economic activities are all about goods and services by people and for people all done for some kind or remuneration or advantage or profit.

Food, clothing, shelter, health, entertainment, security, justice, spiritual comfort are all essential for human beings and as humans progress in body and mind, his requirements and aspirations also increase. Food is the primary requirement of a person who is hungry. But when hunger is resolved, he needs clothing and shelter. When these are also fulfilled, he wants to improve and aspire for other comforts and entertainment.

No human can be self sufficient. God has created humans to exist and prosper under mutual dependence.

Modern economic activities with money as its measuring unit is one of the greatest evolutionary achievement human beings have made. Human progress of any nation is measured by the sum total of the value of the economic activities of its people that our economists define as the Gross Domestic Product or GDP.

The more the GDP the more likely the country's prosperity. Alternatively, the more the people are engaged in economic activities, the more the country's GDP. So, GDP grows when more people are involved in economic activities and their individual gains also keep growing.

Organizations of people help in organizing the economic activities of individuals and to gain collective synergy.

If these organizations make more money than they spend, they make profits. If they make profits, they can afford to enhance their economic activities by employing more people by paying them salaries or even enhance the salaries of their employees. Such business organizations are legally known firms or companies. The companies pay salary to their employees and divide profits among their share holders and promoters. The companies, their employees and their share holders all pay taxes to the government and the governments also get money when business firms progress. 

The money generated through small and big business gets further distributed to people as money never gets accumulated any where, but only accounted. So if some one makes lots of money it will be reflected in his bank accounts but the banks in turn lend that money to some one who uses that money elsewhere for some other economic activity and in turn help others to engage in more and more economic activities.

Thus the more the economic activity, the more the people get opportunities for getting involved in some kind of such activity and gets paid in some manner. Only when economic activities increase, then only employment opportunities enhance. Enhancing the economic activities should, therefore, be the primary concern of all people who come to occupy the seats of decision making in governments.

People occupying governmental positions have many functions. They have to first get money for themselves through collection of taxes and by promoting other economic activities. Then they have to spend the money for various purposes such as defense, policing, infrastructure development, health, education, etc. All functions are important. Income generation and income distribution are all important.

But the primary thing to remember is this: if the income is less then expenditure would be affected and the government would not be in a position to give attention to all of its functions and responsibilities properly. This kind of government would soon become a problem for its people and the nation suffers because such governments would try to do foolish things that kill economic activities. Employment opportunities in the nation come down when the governmental authorities take foolish decisions under stress, ego, incompetence or immaturity to visualize the effects of their decisions wisely.

In my opinion, all business men should be honored because they are the agents and key-drivers of economic activities and employment generation. Businessmen and women are driven by the passion to achieve and move against the odds. The greatest thing they do is tapping the small potentials of individuals to contribute in in a larger way in economic activities under the companies and firms they have created and nurtured. 

So, the Ambanis, Adanis and the Saharas of India have done greater contributions in India by fighting the odds to create large business organizations that employ thousands of Indians. In the process they might have influenced many in the decision making hot spots of the Indian governance and administration by various means. But that is essentially that they do and what makes them different from others. That is why they are business leaders.

It is foolish for any one to kill the organizations that they have created by accusing them of corruption or breaking the rules. It is not good for any country to put such businessmen behind bars for any so called economic offenses. Economic offenses should be deemed as only business errors and it is not fair to equate business errors with felony. It is not good for any democratic country, whether it is the USA or India, to make and implement laws that kill the enthusiasm of people to to do business and enhance economic activities. 

In my opinion, punishment for economic offenses or errors should be only fines payable to the government and such fines should not be such that it would kill the organization for ever. People who violate the laws by taking willful decisions should be taken to task. But that should not kill the organizations that they had created. That would be sheer injustice to the employees , the shareholders. and clients.

In my opinion, it is not at all harmful to the country if any Ambani or Adani or Sahara has achieved huge profits for their companies. Through their companies and their employees the country has made billions as taxes of various kinds. Their businesses have made great dynamism in the economic activity scene of India directly and indirectly. That is what all businesses are doing. If they make profits it is good. Viewing that with jealousy is not good.

Remember, none of these businessmen and women are not going to take all the wealth that they have created with them when they die. The money and the systems that they had created would remain in the country for reaping economic benefits to the people of India.

That is the reason why I adore the visions of Mr Narendra Modi more than that of Mr Arvind Kejriwal. Mr Modi speaks of economic development through companies while Kejriwal speaks of corruption by companies. Modi stresses more on growth while Kejriwal stresses more on putting some breaks on economic growth by trying to cleanse the economic systems from possible violations of rules.

While I do honor and respect Mr Kejriwal for his honesty and spirit of principles, I do have doubts about the practicality of his visions in a country like India where the people are not essentially idealists nor mature enough in mind and body. I think he and his associates are wise enough to understand this and make corrections.

There is no point in talking idealism to people who are deprived from earning a livelihood by involving in some kind of economic activity. Generating economic activities to the maximum should, therefore, be the first priority of any politician who comes to occupy the hot seat of decision making in India.

Let economic activities grow first so that all Indians are gainfully employed and earn a livelihood. 

Other priorities can follow later.

Had I been the PM of India !

I would never be the PM (Prime Minister or Chief Executive ) of this country and that would be true for 99.9999% of the Indian citizens.

But one or two of the 1.2 billion would become its PM now and then.

So this is purely an imagination.

But my country India is a democracy and every citizen has a right to dream or to have an aspiration on how its PM ought to be.

While watching the present and past PMs at times such thoughts forcefully come into the minds of some citizens of this country.

I am no exception. Such thoughts do come to my mind as well.

I would like to share some of my present thoughts on how I would behave, had I been the PM of this country.

Had I been the PM of India, then :

- The first thing I would decide is that I would not become the PM for another term, because I hold the values of democracy high and would not use the power and position attained to cling on to it for ever. This way I make my self free to decide upon issues fearlessly and without bias.

- I would do all I can to see that I  push and pass such laws that make it impossible for immature, characterless and incompetent persons get a chance to be the PM after me.

- I would push and promote economic policies that would promote unemployment levels in the country to come to naught and the average incomes at the lowest levels to reach sufficiently high for the people to lead a decent life as a dignified citizen. I would encourage and honour all business entities who help the nation in this aspect.

- I would push and promote such laws and rules that honour the rights and privileges of each and every citizen of the country, honestly. I would ensure that the ministers discharge their responsibilities earnestly and are accountable for their actions.

- I would ensure that governments are doing only those activities which are for non-profit and welfare of the nation. All profit making businesses shall be controlled by companies set up in accordance with the companies act. Government owned companies shall be run on a no-profit no-loss basis and such companies or organizations shall be only in those areas where it is not desirable and feasible for non-government  entities to operate.

- I would push and promote laws that ensure education services a business as well as a governmental responsibility, depending upon the demographic situation. The laws and rules shall be such that no eligible citizen is denied education for want of money. All educational institutions that are making surplus funds shall be required to share 90% of their surplus for promoting education for the underprivileged.

- I would push and promote a differential corporate taxation system that ensure lower taxation for those companies that spend their substantial profits towards business expansion, research and welfare measures.

- I would establish a law that makes it the government's responsibility to ensure free and essential education, medical treatment and funeral for all wanting citizens whose incomes are below the national average.

- I would reduce bureaucratic controls on business to the lowest and push a law that prevents the states to pass laws that are detrimental to business growth.

- I would facilitate the rules that would make the distribution of national income between the centre and the states in accordance with an acceptable economic formula.

- I would give utmost priority to enhance infrastructure and other facilities to all government offices and establishments including the courts.

- I would ensure that the defence spending of the country is limited to a percentage of the GDP not exceeding that of the first 5 most populous countries of the world. I would also ensure that imports on defence technology , production and procurements is a minimum and on a declining trend.

- I would push and establish such laws that make it mandatory for all private and public establishments to publish their key performance information on their websites accurately and consistently.

- I would ensure that the laws regarding land are revised to enable all round progress in a reasonable time frame. Together with this rural and urban land ceiling would be implemented universally on a pan India basis adopting logical standards. I would also promote modernization of countries land records with modern technology which would eliminate litigations and enable smooth transactions. I would also make such laws that empower the government to take control of all excess and unutilized land and promulgate a development oriented land use policy.

- I would take up law reformation on top priority to simplify the Indian jurisprudence benchmarking it with the best in the world.

- I would ensure that me and my ministers are available in our respective offices for at least 75 % of the time and will not undertake tours and globe trotting unless it is extremely essential.

- I would ensure that all the MPs are made board members of national statutory organisations for better peoples participation in governance and would push to pass laws to this effect.

- I would make it a point of hearing the peoples voices on a regular basis by reading the news papers and the media and never ever depend on my advisers to screen what I should hear and read.


There are much more.

I am sure many of you from this country would also have such thoughts on how your PM or government should function or how your PM should prioritize his / her actions.

Would you like to share some ?


At least that might help a PM in the making !

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