Comparing Corporate Czars and Rich Politicians

When Prime Minister Manmohan Singh warned against high corporate salaries, he didn't seem to have taken into account the fact that there were wealthy people not only in the business world but also in the political establishment.

In fact, if some of the latest disclosures about personal assets are considered, it is obvious that the prosperity of some politicians exceeds the affluence of the corporate czars. 

Perhaps the only distinction that can be made between a rich businessman and a wealthy politician is that the former tends to indulge in ostentatious expenditure. It is for this reason that the prime minister also cautioned against consumerism lest the extravagant lifestyle of the rich and famous should provoke social unrest in a country like India with high levels of poverty.

The reason for this attitudinal difference between an affluent businessman (or company executive) and a politician flush with funds is obvious. It relates to the 'culture' of the two professions.

While the corporate world makes no secret of its preference for hedonism in the belief that expenditure fosters growth by encouraging production, the politicians traditionally focus on simple living, even in affluent countries, since they find it rewarding in elections to equate themselves with people with limited income.

Yet, the fallout from this virtually compulsive show of austerity can have unhealthy consequences. One is the spread of the belief, especially when the assets of the seemingly abstemious politicians are revealed, that they lead double lives and are, therefore, hypocritical since their visible living style does not reveal their real financial clout.

And the other is the supposition that much of their assets are hidden, perhaps stashed away in foreign banks. The reason why the role of the ubiquitous Swiss banks and of 'black money' in a parallel economy was frequently a topic of discussion during the pre-1991 period of controlled economy was that ostentation was even more frowned upon in those days than at present.

But that doesn't mean that conjectures about hidden funds have stopped. After the recent disclosure that Uttar Pradesh Chief Minister Mayawati has assets worth Rs. 52 crore (Rs. 520 million), a leftist politician was quoted by Hindustan Times as saying, on conditions of anonymity, that this sum represented only a small fraction of her total wealth.

What is noteworthy about the Bahujan Samaj Party (BSP) leader's transformation from humble beginnings into an extremely rich person is the short period in which she achieved this feat. It has been calculated that her wealth increased by 400 per cent in the last three years.

It is in this respect that there is a wide gulf between the acquisition of corporate wealth and the affluence of politicians. The former is almost always a slow process and is monitored all the way by government regulators, notably the tax authorities. Let alone the small companies and their executives, or those who haven't been long in business, even the profits of the well-established giants and the remuneration of their executives do not usually increase in leaps and bounds.

There is obviously something odd, therefore, in the exponential growth of the opulence of politicians, which not infrequently leads to the framing of charges in law courts about the 'disproportionate' nature of their assets.

It is a term that is virtually never used in connection with property in the private sector. The reason, as mentioned earlier, is that the growth in this sector is gradual and largely subjected to the laws of the market. It isn't that there is no skulduggery. But the bending of rules invariably requires a clandestine link with ruling politicians and bureaucrats, especially in a regulated economy, as during the License-permit-control Raj before 1991.

While the corporate world has to abide by the laws, or can flout them only with the connivance of people in the corridors of power, the movers and shakers in the political establishment are in a position to earn immunity for themselves from such a regulatory framework.

As Jagjivan Ram, an influential politician till the 1970s, once conceded, he hadn't filed his tax returns for a decade because of "forgetfulness".

The reason why few politicians have been convicted on charges of malfeasance is apparently that the arm of the law is never long enough to touch them.

The prime minister's warning, therefore, on the possibility of social unrest being provoked by the razzmatazz of corporate lifestyle tells only half the story. It is just as possible that discontent will be fuelled by the belief that there are two sets of laws - one for the politicians, especially those who are wealthy, and the other for the rest.

Related to this apparent ability of the politicians to amass their riches by manipulating the system is the phenomenon of criminalization of politics. In the latter case also, politicians with an unsavory background can not only secure their wealth by cocking a snook at the law but also ensure that they are not booked for their offences.

Clearly, the responsibility for setting an example by avoiding "excessive remuneration", in the prime minister's words, applies to all sections of society.

(Amulya Ganguli is a political analyst. He can be reached at aganguli@mail.com)  


More by :  Amulya Ganguli

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