This refers to your editorial “Coal Truths” (August 27). While we welcome the decision of the Supreme Court in deciding the coal block allocations as arbitrary and illegal, we hope the Court will also make a distinction between mines that are far from ready and those which are in production, and also between allotments to public sector and private sector companies. Units which have started production or which have made considerable progress for production should be allowed to have the allocation, maybe with a revised price. There may not be any harm in allowing the public sector entities to continue with the same terms and conditions of allocation.
Though the Supreme Court has categorised the coal blocks allocation as illegal, it has not cancelled them altogether. This creates uncertainty over whether these will ultimately be operated by Coal India Ltd which has a monopoly in the sector. There is a huge dearth of coal in India for power production. And captive coal production is only 50 per cent of the target. So things are really bad in this sector.
The only good thing about the decision is that coal blocks allocated for ultra mega power projects would only be used for that purpose, what Reliance Power tried to do. The Court must provide complete clarity on this issue because if at the end of the day it is to be operated by Coal India, then reform and opening up of the sector becomes more crucial. Strategic investors will be wary after that decision whether to invest in this sector or not. Retail stock investors would have lost a major chunk of their portfolio after this decision.
What’s the logic?
It is heartening to note that the State Bank of India has reduced interest rates on housing loans by 5 basis points to 15 basis points. But what is the logic of reducing interest rate for loans got by women compared to other borrowers. India is a patriarchal society. Some men might misuse the provision and use their better-halves for getting loans at concessional rates and later ditch the women. Also, the provision that the salaried class will pay less interest than the self-employed is unfair. After all, all are not successful in business.
Ranipet, Tamil Nadu
“Who gets say on executive pay?” by Suveera Gill (August 27) throws up pertinent posers. There is no gainsaying the fact that probing queries are normally asked only by minority shareholders while the others simply acquiesce with the motives of the directors. It is prudent and scrupulous to make pay-structure and perks performance-linked. More than the pay, job satisfaction and doing justice to one’s assigned role should drive the top hierarchy of corporates. After all, how much money does one require to lead a luxurious life? The principle of diminishing marginal utility still holds good. Empowering minority shareholders will pave the way for improving corporate governance. More emphasis should be given to what is being said than who is saying it.
Crime and politics
The Supreme Court has done the right thing in refusing to disqualify ministers facing criminal charges and leaving it to the wisdom of the Prime Minister and the chief ministers to take a call on keeping them out of the Cabinet. In doing so it has adhered to the ‘doctrine of separation of powers’ enshrined in the Constitution and avoided the charge of ‘judicial overreach’. The judiciary cannot take the edification of the political class on itself as its primary task. At the same time, the apex court has made it clear that the head of governments at the Centre and in the States should show fidelity to the constitutional trust reposed in them while exercising their prerogative to male any one of their choice a minister.
The onus is now on the Prime Minister and the chief ministers to follow the court’s observation in its right spirit and drop the ministers with criminal charges against them. It will go down very well with the people as a decisive step towards de-criminalisation of politics.
G David Milton
Maruthancode, Tamil Nadu
Root out the ISIS
The US should also share the blame for the rise of ISIS in Iraq, as it is responsible for destroying a stable nation under the late Saddam Hussein, on the pretext of that nation having nuclear weapons. The US itself later admitted that Iraq did not have nuclear weapons. The menace of ISIS, which is also a threat to India, should be dealt with firmly. There are reports that some misguided youths from India have joined the ranks of ISIS. Is the superpower finding itself helpless before a few thousand terrorists?
Deendayal M Lulla
This refers to the article “Who gets a say on executive pay?” by Suveera Gill (August 27). This is a well researched, interesting article.A mention of the need to bring some correlation between pay, perks and incentives in the private sector and the comparable public sector organisations would have helped initiate a more meaningful debate on the inconsistencies in the wage structure across sectors and hierarchies. The cause for unethical practices can be traced to the anomalous costs, prices, wages and income structure.
When the first Indian President’s first month’s salary was fixed at a consolidated amount of ₹10,000, the underlying thought was, reportedly, a ratio of 1:10 between the lowest and highest remuneration across sectors in the country. At that time, there were not many executives in the private sector who drew a higher salary than the President. The argument is not that such a ratio should remain static. But, someone should look at the ethical inconsistency in a small Indian company paying two of its ‘employees’ a remuneration of ₹50 crore or above, when hundreds of executives in public and private sector who do much more work get paid much less than two per cent of ₹50 crore. Any degree of patriotism will not stop ‘affected’ individuals from making comparisons.
Shareholders have limited powers to curb this menace of high executive compensation. The promoters, by being the majority stakeholders, have their way when it comes to voting. If we tax incomes above a certain threshold at very high rates it will in turn discourage top executives from taking salaries above certain limits which will affect their post-tax income.promotors will invest that money in their businesses which is actually good for jobs and growth. High compensations are responsible for the volatility in the real estate market and the stock markets. It is a proven fact in the western world that the housing bubble and the stock market bubble and the subsequent crash of 2008 were caused by many moving parts, in which the CEO and top management compensation played a role too. Let’s not go down in history as a nation with among the highest inequality rates and a rising number of billionaires every year.
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