It is unfortunate that prime minister Manmohan Singh's speech at CII on "Inclusive Growth-Challenges for Corporate India" ended up getting written about in media mostly for a passing remark he made on CEO pay. The good man's intention was to suggest a partnership between the government and the increasingly affluent corporate sector to solve a problem that is as disastrous for the country economically as politically and socially. The problem is of a growing divide between the haves and the have-nots. Finding a solution to this problem is not easy; the government, which can and must do a lot more to ensure equitable growth in the country, has its constraints, the biggest of which is effective delivery of social benefits. More often than not, the government's grand schemes for poverty alleviation, rural education and health, and agriculture end up enriching politicians, bureaucrats and other intermediaries, rather than the intended recipients.
Besides, employment, the only way the poor can be pulled out of poverty while creating economic value, has been shrinking in the public sector. The organised private sector is not a large employer-in fact, a shockingly small number of people, 8.2 million, work in it-but it's the government's best hope for creating work in the organised sector. The unorganised sector accounts for more than 90 per cent of the employment in the country, but employment here is often a result of how well the organised industry is doing. Therefore, it is not surprising that Singh's "Ten-Point Social Charter" began by talking of employment generation and how manufacturing is the only sector after agriculture that can create jobs enough to make a difference to India's growing population. In particular, the Prime Minister wanted industry to take care of its workers better, be proactive in offering employment to the less privileged, invest in people and their skills, and fight corruption at all levels.
Such a partnership is in industry's interest. While a sliver of workforce is reaping the benefits of a surging economy, resulting in a boom in consumer products and services, there are others whose lives haven't changed. Industry will find it impossible to sustain the demand if it were to bank only on a small number of consumers. After all, how many cars, toothpastes, or insurance is one family going to buy in a month? New consumers have to enter the market, and the only way that will happen is if they are given opportunities to join the economic mainstream. We believe that was the larger point of the Prime Minister's message, and India Inc. will do well to heed to it.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today