Bloated Salaries in India

chillibreeze writer — Shilpi Sharma

“If you pay peanuts, you will get only monkeys” – HR adage

As the process of globalization strikes deeper roots in India, an increasing number of Multinational Companies are rushing to set up base in the country. This advent of MNCs has also resulted in the salaries of well-qualified and experienced professionals going through the roof. These foreign companies, for whom money is not a constraint, have completely redefined pay packages and compensation structures in India. Where earlier Indian youth would dream of getting into PSUs and FMCG companies, they now aspire to get a break in Multinational Companies mainly motivated by their hefty pay packages.

On one hand, these developments have led to qualified Indians not leaving the country in search of greener pastures. They can now earn as much as their foreign counterparts even in their own country. This has contained the brain drain problem. But, there is also a flipside to this unbridled growth in the salaries of top officials – this has further exacerbated the already glaring disparities between the rich and the poor. India’s growth story has just been restricted to the select few who have the right qualifications to bag the top jobs; a large part of the country is far removed and alienated from this phenomenal growth in salaries. In a society where millions of people are still living below the poverty line without access to proper educational facilities, such gross disproportion is absurd and unacceptable. The current scenario could escalate into grave consequences for the country as the wide gap between the haves and the have nots will lead to resentment and could manifest itself in the form of social unrest, increase in petty crimes and anti-social activities.

The disproportionate salaries of CEOs have been a subject of nationwide debate, with even the Prime Minister, Manmohan Singh suggesting a cap on the salaries of top executives. That has been met with sharp criticism by the country’s various chambers of commerce. The ASSOCHAM, FICCI and CII have all been unified in their dismissal of the PM’s suggestion and justify the high salaries of top officials as the inevitable consequence of the huge mismatch between the demand and supply of well qualified and experienced professionals and shortage of skills in key areas at the top level.

The solution does not lie in curbing salaries at the top levels and denying deserving individuals their due, for talent will always fetch its price. What can be done instead is that the poor and underprivileged be given education, employment and development opportunities to compete on an equal footing with the others and thus get a fair chance to excel. Pay Packages need to be linked with performance, where top performers are paid what they deserve. Competence should be the only criteria for compensation. Indian CEOs should be penalized if they fail to deliver. This would also serve as an example for the masses who would realize that the only way up the corporate ladder is consistent hard work. High incomes of top ranking officials can also be checked by imposition of higher tax slabs on people who can afford to pay them. This tax revenue can be utilized by the government for the upliftment of the poor and downtrodden. With India shining brightly, it is imperative that the benefits of development be shared with the underprivileged and needy rather than a select few.

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Shilpi says, "I'm straightforward and opinionated. I am a part of the corporate world and have a passion for writing and try to find time for it as often as I can."

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