The Hindu Business Line : Will DTC become law?

I don’t think so. There is a feeling amongst the commentariat that it has given too much away to those who can afford to pay. A presumptive income of 8 per cent of gross receipts for professionals is something that is bound to warm professional cockles but the one that could rankle those who have to pay tax through their noses.

Similarly, wresting away tax concessions from Public Provident Fund only to popularise and bolster the floundering New Pension Scheme has not done too well with the masses. MAT of 2 per cent on the corporates on the gross value of their assets is a sore point with them. I think a lot needs to be done to render it fit to be signed into law.

Executive pay

Do you agree with the Corporate Affairs Minister, Mr Salman Khurshid, when he says corporate executive salary in India is excessive?

Shrilini Raja, Chennai

The company law says the top managerial remuneration per person cannot be more than 5 per cent of the net profit and if there is more than one such person, not more than 10 per cent. Those who support full freedom to corporates to fix executive salary within this broad parameter say that micromanagement is not desirable and that Mukesh Ambani’s salary after all is only 0.26 per cent of the net profits despite sounding vulgar at Rs 45 crore when expressed in absolute terms.

The point, however, is not this. What about inter se parity within the company? This is what Mr Narayana Murthy pointed out and said that the gulf between the highest and lowest salary in a company should not be more than 15 times. In other words, if the CEO of a company gets paid Rs 15 crore then the lowest employee should be paid at least Rs 1 crore.

The pie should be equitably shared. And while doing this let us not confuse the dual roles of the CEO-promoters. Many people say that the seemingly excessive salary of the CEO is the just reward for his risk-taking by subscribing to the equity. They cannot be more wrong. For investing, they get rewards in the form of dividend and capital appreciation in the market; salary is not a recompense for risk-taking. In the event, I agree with the Corporate Affairs Minister.

S. MURLIDHARAN

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