Click to play videoNew Delhi: India Inc's response to Union Government's suggestion of austerity in salaries has been negative.
Two third of the 100 CEOs polled in an Associated Chambers of Commerce and Industry of India (Assocham) survey turned down Union Corporate Affairs Minister Salman Khurshid's suggestion that salaries of CEO be capped.
In the Assocham survey 60 of the 100 top CEOs say the best talent cannot be attracted if salaries are capped.
Market forces could not be ignored while determining CEO salaries. The same feeling was echoed by CEOs of companies polled by CNN-IBN.
"I do not think the Government can micro - manage everything. I will just result in over regulation, one more regulation, one more return to file, one more inspection to be done, one more action by government officials. So I am not sure that's a good idea. I think that will impede growth rather than facilitate," says Sanjeev Bikhchandani, founder & CEO, Naukri.com.
"At Mindtree we have always had salaries which are way below market salaries," claims Mindtree Technologies CEO Ashok Soota.
Management salaries are already governed by corporate law. A company's top management cannot earn more than 10 per cent of total profits.
An amendment to the Company's Act will also give shareholders a say in deciding executive salaries.
The amended Act, tabled in August this year, is currently before a standing committee of Parliament
"Ultimately it's the share holders who must decide what they must pay to the managers, directors of their company. We will educate the shareholder on this issue and our every act, every word we use and stay in Dalit family is reflective of the basic fundamentals that there are people who are still not getting basic amenities in life in this country," says Khurshid.
The biggest challenge India faces today is in becoming an economic super power, says the Assocham survey and for that India needs to pay.
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