Finance minister P Chidambaram on Monday said salaries in the private sector should not be regulated. Two months ago, his boss, Prime Minister Manmohan Singh, had said corporate India should resist paying excessive remuneration to promoters and senior executives.
?Salaries ought not be legislated,?? said Chidambaram, addressing students of Mumbai University. The salary system in the public and private sectors cannot be compared. The risk and reward applicable to a private sector employee were not comparable with civil servants, he added.
?Except in Singapore, a government employee earns much less than his private sector counterpart across the world,?? Chidambaram pointed out. ?A fund manager of ICICI Prudential Asset Management Company earns a lot, but he carries the risk of being fired overnight,?? he explained.
?The President of India earns a salary of Rs 50,000 and the salary of the Union finance minister is around Rs 32,000,?? Chidambaram said, adding that the motivation and value system for public or research-oriented jobs were very different from private sector jobs. ?CV Raman could not have been a great scientist if he thought he should be paid like NR Narayana Murthy or Azim Premji,?? he noted.
Corporate affairs minister Prem Chand Gupta had also, a month ago, said the government would not regulate corporate salaries. ?There is no intention to regulate the remuneration of directors and top executives of companies,? he told the gathering at a seminar on corporate governance organised by an industry chamber in New Delhi on June 25.
During his interaction with Mumbai University students, the finance minister also dwelt on other issues. He hinted that the Reserve Bank of India would, at an appropriate time, revise policy rates downward, which would in turn determine the interest rates in the system. ?Inflation has fallen from 6.7% to 4.2%. The inflation management policy of the central bank has been exemplary,?? he said.
According to Chidambaram, there is a dearth of sound infrastructure projects that can be executed within a stipulated budget and time. On the Sensex, he said, ?The Sensex cannot be the sole important indicator of prosperity. There are many other micro and macro indicators which are important for judging economic development.? The economic growth witnessed by India is investment-driven and not consumption-driven, the finance minister added.