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New Delhi, May 1:: Responding to charges of cartelisation against the industry, newly-elected CII President K V Kamath on Thursday said corporates must ask themselves whether their actions in a demand-driven market was causing distress to others.
"The government is sending a clear signal. We have to respond," he said when asked to comment on Prime Minister Manmohan Singh's veiled warning against cartelisation.
Kamath said his predecessor Sunil Bharti Mittal has already said that CII abhors cartelisation. "That's our response."
However, industry must respond to the call given by the government to join it in the fight against inflation, he said at CII press conference o Thursday.
The Prime Minister, while addressing the CII annual session on Wednesday, had said that the industry, "particularly in sectors characterised by significant market power in the hands of a few producers have a societal obligation to assist the government in moderating inflationary expectations".
Few sectors like cement and steel are facing charges of forming cartels to make profits from high demand. Steel prices have gone up by close to 50 per cent in the last 12 months forcing the government to take several administrative and fiscal measures to rein in prices.
Responding to the Prime Minister suggestion of sober compensation for the industry leaders, Kamath said sharp wage increase was responsible for corporate lifestyles. He said the increase in salaries, particularly of white collar personnel, would not be sustainable if India has to maintain its competitive advantage.
"We cannot have 12-15 per cent wage inflation. This has happened because we have not been able to create enough skilled workforce."
Kamath said the industry has to take this message, which will increasingly come under the corporate governance norms.
High salaries of CEOs has become a subject of debate and it is for the second time in a year that the Prime Minister has touched upon the issue.
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