Get the Rich to make the Poor rich

Implications: 1.On the Indian sub-continent affluence and poverty have co-existed for centuries. 2.To drive economic development, incentives need to be provided to people capable of delivery.

Analysis: If economic development has to take place and the nation has to attain its desired goal of developed country status by 2020, then the parameters that exist in the developed countries must be applied in India as well. A company can hire the best talent by paying top dollar. A company is there to earn profits and maximise wealth for its shareholders . Corporates are answerable to its shareholders. Corporates at the same time have also shouldered the responsibility of helping the community via sponsorships etc.

Having said that, India is a country with pockets of affluence amidst plenty of poverty. But poverty is more visible because of its huge population and India not being a welfare state as in western countries. But that should not deter corporates or the Government/s from spending top dollar to lift economic activity. Think rich and act big and one day you will become. Look at Japan and Germany and how they have resurrected their economies after the WWII. Constant self-pity will get the country nowhere. Therefore what is happening in India now is a movement in the right direction but the only word of caution is not to overdo it or it can lead to being classified as organised crime.

It is surprising that whenever there is talk about big money in association with India, country’s poverty is thrown in as a teaser. Poverty need not bog down the country from development. The rapid development that is taking place in India and China is attracting worldwide businesses. Multinationals do not trade in cents. Sum total of a nation’s wealth is measured by its economic activity and the wealth of its companies (read stock markets). Increased corporate activity is one of the ways of removing poverty and providing employment to the people and contribute to the economic development of a country. And as such, when a company makes profit it is directly contributing to the wealth of a nation ( taxes et al). And this is where a CEO steps in. One of the responsibilities of a CEO is to maximise profits and the wealth of the shareholders ( share price). To extract maximum performance from a CEO and the team big money may have to be spent. That is how things in every part of the world work and India is no exception. If the corporates did not spend big money on talent then the economic activity we are witnessing in India today would not have taken place. Think of the number of people that have been provided employment. Think of Reliance, Infosys, Wipro not counting the Tatas and Birlas and their exponential growth . Think of the developed countries of today before the Industrial revolution. Think of the genesis of French Revolution .

At this juncture in India’s economic journey it needs top talent to lift its impoverished population out of poverty and in the process extra incentives and money (bonuses) have to be paid to tweak performance out of its talent in the larger interests of the nation, so be it.

Napolean Bonaparte once said that only two things matter – Money and more money, Power and more power and the rest doesn’t matter. But if the modern CEOs trend is towards that end by forgetting the community, then it is time to worry. We all know where he ended. To be ambitious is one thing and to perform responsibly is a different ball game.