Excesses at the top could derail the great Indian economic miracle

By Stephen Manallack
22 June 2007

Enjoying enormous personal wealth is not all that there is to the great Indian economic miracle.

In calling for some leaders of Indian business to cut back on "vulgar" public displays of excess and to control breakaway executive pay, Indian prime minister Manmohan Singh has had the courage to say in public what is privately troubling many political leaders in the west. More than that, he bravely delivered his message to some of the biggest corporate leaders at a Confederation of Indian Industry annual meeting, hardly a sympathetic forum to such views.

Some Western media have expressed alarm at the tone of this speech, speculating that it heralds a reversal of India''s drive for economic reform and growth. Others have politely ridiculed it as a "sermon" from an "elder statesman" figure.

But despite these attempted put downs, the powerful truth in Dr Singh''s speech is that in a country where the poor are still waiting to experience the "trickle down" of prosperity, excess is simply poor leadership and could lead to huge social unrest.

Making this worse, India does not have an entrenched aspirational drive, so dominant in the West, and the poorer Indian citizens meekly watch the open display of wealth of the rich, while putting down their own exclusion from it as their karma and hope that they, too, one day, will enjoy some of that prosperity.

The one thing that could derail India''s economic miracle is not the wise words of Dr Singh, it is the social unrest triggered by the open display of the excesses of corporate high flyers.

Excess is not a new thing in India. What is new is that this wave of outlandish spending by the few at the top comes at a time when more than half of the community is waiting, or feels that it is waiting, to enjoy the benefit of that economic growth. This simple timing could undermine any collective will to become a modern economy.