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Wednesday, January 21, 2009

Good CEOs, bad politicians?

I have got the following message forwarded to me again and again via email, and I thought it’s time I responded to it, once and for all:

Salary & Govt. Concessions for a Member of Parliament (MP)

Monthly Salary : 12,000
Expense for Constituency per month : 10,000
Office expenditure per month : 14,000
Traveling concession (Rs. 8 per km) : 48,000 ( e.g. for a visit from Kerala to Delhi & return: 6000 km)
Daily DA /TA during parliament meets : 500/day
Charge for 1 class (A/C) in train: Free (For any number of times)
(All over India )
Charge for Business Class in flights : Free for 40 trips / year (With wife or P.A.)
Rent for MP hostel at Delhi : Free
Electricity costs at home : Free up to 50,000 units
Local phone call charge : Free up to 1 ,70,000 calls.
TOTAL expense for a MP [having no qualification] per year : 32,00,000 [i.e . 2.66 lakh/month]
TOTAL expense for 5 years : 1,60,00,000
For 534 MPs, the expense for 5 years :
8,54,40,00,000 (nearly Rs. 855 crores)


This is how all our tax money is being swallowed and prices hiked on essential commodities.
And this is the present condition of our country:
855 crores to make their lives liveable !!
Think of the great democracy we have..............

Now I could write a book on this subject, but I hope light will dawn after reading just the following observations:

1. When you call an MP ‘unqualified’, you not only ignore the fact that he has become an MP by fulfilling all the qualifications laid down by Parliament, but that he has been voted for by several lakh, or even million citizens. By insulting him, you insult the judgment of so many of your fellow-citizens! Are you so stupid that that never occurred to you? Or do you consider yourself vastly superior to all your fellow-citizens? If so, why?

2. Besides, who told you that all MPs are unqualified, even academically? How many MPs do you know? Let me name a few – Manmohan Singh, P. Chidamabaram, Pranab Mukherjee, Somnath Chatterjee, Lalu Yadav (IIM Ahmedabad students felt like little ignorant children when he lectured them – don’t you even read the papers?), Arun Jaitley, Subramanyam Swami, AB Vajpayee, L.K. Advani, Ajit Singh, Montek Ahluwahlia,… have you ever bothered to find out about their qualifications? I could name dozens more. (Oh, I forgot to say this: many big-ticket CEOs are MPs too, Anil Ambani and Vijay Mallya for example. Does that automatically make them 'unqualified' and 'corrupt'?)

3. And at the same time, who told you that all CEOs are very hardworking, clever and highly-qualified people? Again, read some papers and magazines. Many CEOs become CEOs simply because they have very well-connected parents (often the founders of their companies: look at the Ambani brothers) – many, after somehow managing to scrape through their school finals, bought an MBA from one of hundreds of (even well-known) B-schools around the world which gladly give such degrees to duds in exchange for a couple of million dollars. Grow up! And when those CEOs sink their companies, they always run to the government for help – look at all the bank CEOs and carmaking CEOs in the USA right now, read about Enron and Arthur Andersen, about Kenneth Lay and Madoff, about Lehman Brothers and Satyam and Raju and PWC! How are their immense ‘qualifications’ serving their companies and their nations now? And don’t you even know how many hotshot ex-CEOs are currently serving jail terms for plain cheating and robbery, or have narrowly avoided prison by spending millions (of stolen money) on lawyers’ fees and bribes?

4. And what exactly do you mean by ‘qualifications’ anyway? How ‘qualified’ were Edison, Bill Gates, Jamshetji Tata, Tagore, Vivekananda, Ramanujan and Satyajit Ray? How qualified was Akbar? How qualified were some of the greatest presidents of the US? Why are you so fond of using words you don’t understand?

5. And now, coming to the issue of pay: a mere bank clerk has a basic salary greater than that of an MP. You sure Rs. 12,000 a month is too much? How much responsibility and risk does a bank clerk or call-centre employee or airhostess or hotel receptionist carry compared to an MP? (are you sure you even have any idea at all about the work that an MP has to do?) What sort of basic salary would you ask for in order to want to become an MP? We both know the answer, right?

6. Even if the total (Rs. 32 lakh) expense on an MP per year looks big, think: much of that goes on phone bills and travel bills and office expenditure. Are you sure it’s not actually too little? Have you any idea how much an MP has to travel and talk just to keep in touch with both parliament and his own constituency? And if you were an MP, would you honestly volunteer to travel second class instead of a/c., or pay for those thousands of phone calls every month from your own pocket? Why are we all so hypocritical, ignorant as well as silly?

7. Finally, if the total expenditure of the country in five years on all MPs taken together (Rs. 855 crores) sounds big, compare that with a few facts: Indians spend more than a thousand crores each year on private tuitions for schoolgoers, smoke and drink several tens of thousand crores every year, a single year’s defence budget is over Rs. one lakh crores, and our 100 biggest companies spend almost that much together on office parties in a year, as any tax-official will tell you. Compared to that, we spend Rs. 855 crores on about 800 people who are literally responsible for the lives and deaths of 1100 million Indians (it’s the same in the US, by the way, check out this link: http://people.howstuffworks.com/midnight-regulation1.htm). You still sure that’s a lot? Managers who oversee the sales of Barbie dolls and cola drinks get paid ten or twenty times that much. Suppose I suggest that before we even dare to call for harder work and greater efficiency and honesty from our MPs, we should first raise that figure at least twenty times?

Of course it is not my case that all our MPs are learned, and wise, and hardworking and dedicated to the progress of the nation. But if a lot of them are worthless and crooked, I insist we think about these things: that a) they reflect us, all of us with nice self-images who think nothing about cheating in examinations and stealing office stationery and spreading nasty gossip and defrauding our own relatives and submitting forged certificates to get jobs and promotions, b) if the political world has gotten filled with incompetents and crooks, it’s because all the ‘good’ people have chosen to play safe and stay away, simply because deep inside they know perfectly well it’s too much risk and trouble and hard work for too little, c) there’s nothing sacred and holy about businessmen/CEOs, for heaven’s sake. They are out to make money out of you, period. If a businessman can make money by selling penicillin, he’ll do that; if he finds he can make more money by selling water in the name of penicillin, he’ll do that instead. It is for politicians and the government to see that he can’t make money by being crooked. The father of the modern free-capitalistic economic ideology, Adam Smith himself, wrote that businessmen never get together, even for relaxation and merriment, but the conversation ends in some contrivance to raise prices or some trick to fool the public! More than 200 years later, the new President of the USA has admitted in his inaugural speech that greed has contributed largely to the current economic mess in that country. Woe betide a nation where so many young ‘educated’ people either don’t understand what government is about, or why it isn’t working well, and don’t care to do a thing to change it for the better, but are so eager to say nasty things about it!

One last thing. The private sector of ‘great’ businessmen is not only full of crooks but loaded with incompetents, as I can vouch from a lifetime of disgusting experience. Lots of back-office boys and girls, armed with MBAs and working for this bank or that mutual fund, can’t copy my name right from a cheque that I have drawn, they get paid 15-30,000 rupees a month for doing precisely that sort of job, and they dare to call themselves educated hardworkers. And I have been cheated by my own ex-student who fobbed off a bad insurance policy on me by counting on my trust, so that the commission may go into the down payment on his new car. I tremble to think of what is going to happen to this country when these duds and frauds become CEOs. Think about it, all.

[P.S., Jan. 24: I couldn't resist adding on this relevant link:


For those who mightn't know, Sunanda K. Datta-Ray is a veteran journalist, one-time editor of The Statesman, and now a respected columnist with wide international experience of business and politics.]

P.P.S., Feb. 01: And it's not just our PM, either. The world's political leaders currently gathered at Davos, Switzerland, to discuss a rescue package for the world economy, have not bothered to invite corporate bigwigs this year - it being now understood once more that such people are only good enough to swindle us out of our money in good times and hide behind government nannies in bad times! - and President Obama has snarled at financial fat-cats in the US, calling it 'shameful' that they extend the begging bowl to government with one hand and reward themselves huge pay packets with the other...

see http://www.telegraphindia.com/1090131/jsp/frontpage/story_10465834.jsp

Update, April 11: In the cartoon on the business page of today's edition of The Telegraph a character says "I'm used to big pay and no work ... I've always been a CEO"!


Aakash said...

Dear Sir,

Your comments come in a time when a lot of people a looking at CEOs to run the country. Do they even relize that most companies, which they consider as models of development, function even without considering the social or environmental costs?

Thanks for writng about this on your blog, for in times such as these the issues you have raised need to be pointed out to most peolple.

With regards,


Tanmoy said...

Dear Suvroda,

In leading our lives, certain oft neglected abstracts like honesty, integrity, ethics, and trust play a huge part in determining our success or failure as a human being. In positions such as that of a MP or even a CEO, undoubtedly because of the great responsibility these abstracts assume tremendous significance. Sadly, we witness a large number of politicians as well as CEO’s who don’t seem to have these and that is how our belief is questioned time and again.

These forwarded emails are reactions of such broken trust.

Being in a state of dismay does not give us the right to spread rumours and misinformation. Unless the people who send such emails read its contents and think about them, I strongly believe they should not spread such emails. It only makes them look silly.

Suvroda has rightly pointed out certain pertinent issues in his response to this particular email. Neither a person’s educational qualification, nor his bank balance is an endorsement of his skills to run a nation. To my mind, our nation shall be run properly whenever we can establish accountability across all levels. It may sound easy, but in reality it isn’t that easy. Accountability across all levels includes our accountability towards humanity too. Unless and until, we are ourselves accountable for our actions, how can we expect others to be?

We may not be in a position of authority like the MP or CEO at the moment, but we have complete authority in our home, environment, our work area and in the way we lead our life. We need to sit back and judge whether all of us can claim to do the right things. This judgement may open up an opportunity to look at a great deal of things, which we can improve.

I say this with certainty.

Thus, next time anyone of us, are tempted to spit on the streets, or push our waste under our chairs (a typical thing which can be seen in Indian functions, trains), lie to our friends, spread senseless rumours without judging them thoroughly – let’s stop ourselves from being dishonest. Unethical practice is a virus which keeps on growing and ends up engulfing us. These apparently small bits of honest actions, makes us choose the better leaders too because whenever a corrupt leader sees a bunch of intelligent and honest people whom he represents, he ceases to be corrupt. Additionally, if you are yourself honest towards your learning, diligent towards your work, you can even point out discrepancies if you encounter a corrupt CEO. Currently, it may seem that we are in a lawless nation where guilty are never punished but in reality we are our biggest obstacle to enforce a law. Let’s not be such obstacles.

In coming days, we may see more lawlessness – with convicts of numerous crimes being freed, people like Sanjay Dutt being projected as leaders but that should not stop us from being honest in leading our life. These would undoubtedly make us more frustrated, but it should not stop us from being what we want our surroundings to be! Cleaner, healthier, wiser.

Personally, I have always been perturbed regarding the weaknesses in me. After coming outside India, I have become much more conscious and feel the need to change as rapidly as I can. It makes me feel ashamed that boys / girls of my age (even younger), here contribute to nation building starting with very small actions in their lives. These have made me open to feedback which I used to offend me earlier. Of course, changes in me cannot happen overnight but I can always try to better myself.

Subhanjan said...

This blog is mostly read by those students of Sir whose thoughts try to follow that of Sir's. I wish Sir had the opportunity to deliver these points in an auditorium full of 'corporate people'. The anger and shame on their faces would have been a special scene to witness. I have inscribed all the points of Sir on my mind. I will try my best to frame my thoughts and actions on the basis of these realisations in order to make my life and that of others better.

Suvro Chatterjee said...

So many visits, so few comments. Very interesting. Not one of all those who forwarded that stupid message so many times to me via email has written in either to say 'Sorry, I am enlightened now: thanks for opening my eyes', or to ask an honest question, like 'Will you please tell me something about the work an MP does? I realise I have no idea...'

Tells me one more time how many people are far more eager to acquire half-baked second-hand opinions than interested in learning facts!

Sayan Sarkar said...

At this juncture, I would like to mention an article which I read a few days back. It is on regulation, its nature and importance

Andrei Shleifer, Understanding Regulation,European Financial Management, Vol 11. No.4, 2005, Pp 439-451.

The author explores as to why regulation is necessary from an economic as well as social perspective. He goes on to explore the four different types of regulation employed by society-private orderings, independent juridical system, regulatory state and socialism. Each of the above represents some trade-off between disorder ( private expropriation) and dictatorship (state expropriation).

The paper helped me have a better understanding of socio-political systems, and helped answered many queries which I had for a long time.I would like to strongly recommend the literature to those who might be interested in knowing more about the myriad interlinks between the economy, private players, the law and the state.

Kaushik Chatterjee said...

Well, the outbursts and slants and eccentricities aside, which perhaps are his forte, an acumen he has consciously mastered all these years, lending him a USP-sort-of-distinctive-edge over others, you perhaps cannot agree more with Dr Ashok Mitra’s musings in his article “Economists Unbound” (http://www.telegraphindia.com/archives/archive.html) in The Telegraph’s 30th January 2009, Calcutta edition. Though, well past his primacy or even potency in the professional turf, when his exhortations could have found an import too telling to ignore, you would agree that even now, it is indeed a dare to call the bluff and pull off the rug so smugly held around the hallowed portals of the subject of economics.

And indeed, if I could leave the obvious ominous shade that Dr Mitra alludes to, which has taken a heavy toll on the professional integrity of the subject itself, I could find an echo of what Suvro, way back in the late eighties, well advanced in his incisiveness and sagacity to view the subject both from within and without, could ruminate about his growing disillusion with the subject ; how, he was pained to see the rather “ quantitative, positivist, reductionist, deterministic”, market-determined, causal models of post neo- Keynesian regime, based on narrow and strict conditionalities, almost exclusively pivoted on extremisation principles, were irretrievably, robbing the subject of its much-needed social and egalitarian focus.

His early take on Galbraith, Schumacher, to name just a few, the lengthy discourses he was engaged with Prof Heilbroner (the highly respected author of “The Worldly Philosophers”) where Suvro expressed his doubts, the multiple forks that ‘befuddled’ him (‘efficiency’ versus ‘equity’, ‘individual profits’ vis-à-vis ‘social welfare and costs’, the ‘positivist postulates of rational expectations’ versus the ‘social and environmental outputs’) and restlessly queried on the possible paths of redemption!!!!

Love and Regards,
Kaushik Chatterjee

Suvro Chatterjee said...

Thanks for the comment, Kaushik. It's always good to see that some people still remember (in terms of specifics) what sort of a youngster I used to be!

In that context, do note that I constantly keep lamenting that it takes far, far less knowing and thinking and remembering to be considered a bright young thing these days: and the less these young people know, the more arrogant and angular they are in their opinions!

Suvro Chatterjee said...

The older I grow and the more I learn of the world, the more I bristle to hear of mere businessmen being hailed as heroes and models and ideals... knowing better and better how the best of them are little better than crooks who have been daring enough and lucky enough and shameless enough. The latest corroboration is the arrest by the FBI of Rajat Gupta, one-time poster boy of the Indian wannabe smart-ass class, ex-CEO of McKinsey, on charges of outright fraud... see

Suvro Chatterjee said...

I shall keep badgering away here in the hope that a few people, at least, will read and think and never admire anybody again merely for the 'virtue' of being rich. Here is a list of crooked yet highly successful businessmen who were mostly caught and punished:


Remember, for every one who is caught and punished, at least a hundred manage to get away...