Description
Why do we need performance in isolation i.e. labour must deliver while the management should get a bailout which should be passed to the same labour since they constitute the bulk of public. While the argument may have some weight that the USA, China and some other countries have grown out basis the same model of flexible labour and financial laws which are in favour of the management/entrepreneur, however Europe and Japan where laws and practices differ have not too badly either. It must be noted that the US and Chinese model is based on abundance of capital and infrastructure and has very disproportionate wealth distribution although it may have delivered a bit faster ‘growth’. In India with our kind of diversity, concentration of wealth in select few hands may result in political turmoil. What we may need is better labour industry relationship oriented towards performance and a strong facilitation mechanism to propel investments with liberal mechanism for takeover and amalgamations (something resisted by entrepreneurs who want protection). Our FIs have mostly supported the demand from management/entrepreneurs.
Performance Orientation and Job/Business Security
By: Amit Bhushan Date: 13
th
June
2014
he demand for re!ea" of #Draconian$ %abour "a&s is 'ro&in' by the day &ith
industry not restin' on "aure"s of its re!ea" in a state a"one( he ar'ument is an
industry friend"y "abour "a& &i"" su!!ort industry to in)est more thereby enhancin'
demand for industria" "abour "i*e the +SA or as in case of ,hina/other South -ast
Asian countries( he ar'ument can be b"and or in form of easier e.it !o"icy/
f"e.ib"e contract "abour etc( he idea is that such "a&s &i"" he"!/!ush "abour to be
more !roducti)e( 0e do not hear the same !ro1!erformance rhetoric &hen
mana'ements of com!anies &hich in 2ndian scenario is most"y shareho"din'
fami"ies are not !erformin'( he "o'ic is that it &i"" dri)e a&ay in)estments and
deteriorate in)estment c"imate or )io"ates secrecy in business(
2t is for'otten that &e do not ha)e those Draconian "abour "a&s affectin' sma""
units &here a'ain forei'n in)estment as &e"" as techno"o'y im!orts are "ibera"(
Our S3-s are sti"" shrouded in "abyrinth of dismay and not a shade of S3-s in
-uro!e( he situation is des!ite of a host of !o"icies such as S-4s and 2ndustria"
5ones and other !romotiona" schemes( 2t is the other !an's "i*e ca!ita" and
credit/ a)ai"abi"ity of !o&er/ ra& materia"s as inabi"ity to reach customers
inc"udin' the mana'ement$s commitment to business itse"f6 seem to be of a
'reater concern( he "ar'er cor!orates shou"d actua""y be facin' those )ery
!rob"ems in near"y same !ro!ortion &ith some additiona" "abour "a& re"ated
&oes/ ho&e)er the "abour "a&s seem to 'et a "ion$s share of co)era'e in media(
he same media doesn$t s!end a dime &hen such "ar'e cor!orates routine"y
see* financia" re!rie)e from 7inancia" 2nstitutions &hen "ar'e discounts in interest
and !rinci!a" credit amount is sou'ht 8&hich is routine"y !assed to ta.!ayers as
PS+ ban* *ee! see*in' re1ca!ita"i5ation and in 2ndia this is much hi'her than
say -uro!e9 or they )anish a"to'ether &ith de!ositors/ creditors and sma""
shareho"ders money( 0e a"so ha)e routine cost esca"ations in 'o)ernment
!ro:ect and the user char'es in Pub"ic Pri)ate Partnershi! !ro:ects not bein'
ana"y5ed by media &hich remains )oca" &hen it has to se"" shares and bonds of
these "ar'e cor!orates(
0hy do &e need !erformance in iso"ation i(e( "abour must de"i)er &hi"e the
mana'ement shou"d 'et a bai"out &hich shou"d be !assed to the same "abour
since they constitute the bu"* of !ub"ic( 0hi"e the ar'ument may ha)e some
&ei'ht that the +SA/ ,hina and some other countries ha)e 'ro&n out basis the
same mode" of f"e.ib"e "abour and financia" "a&s &hich are in fa)our of the
mana'ement/entre!reneur/ ho&e)er -uro!e and Ja!an &here "a&s and
!ractices differ ha)e not too bad"y either( 2t must be noted that the +S and
,hinese mode" is based on abundance of ca!ita" and infrastructure and has )ery
dis!ro!ortionate &ea"th distribution a"thou'h it may ha)e de"i)ered a bit faster
#'ro&th$( 2n 2ndia &ith our *ind of di)ersity/ concentration of &ea"th in se"ect fe&
hands may resu"t in !o"itica" turmoi"( 0hat &e may need is better "abour industry
re"ationshi! oriented to&ards !erformance and a stron' faci"itation mechanism to
!ro!e" in)estments &ith "ibera" mechanism for ta*eo)er and ama"'amations
8somethin' resisted by entre!reneurs &ho &ant !rotection9( Our 72s ha)e most"y
su!!orted the demand from mana'ement/entre!reneurs(
Perha!s a "ibera" "a& that a""o&s for easy ta*eo)er of com!anies that ha)e not
dec"ared di)idends in "ast three1four years or &here di)idend !ayout amount in
"ast 3 years is "ess than ;< of the a)era'e of 3ar*et ,a!ita"i5ation )a"ue &ou"d
do much more in brin'in' in in)estments( 2t is common *no&"ed'e that 3=A has
brou'ht more in)estments that say 7D2 8&hich the re"a.ation of "abour "a&s
see*s to brin'9( he mana'ement &ho do not !ayout di)idends because of
in)estment in rea" 'ro&th &i"" be ab"e to command hi'h !remium/ &hi"e those
&ho are stru''"in' &i"" be ab"e to 'et 'ood )a"uations( 7or non1"isted com!anies/
the ban*s shou"d be 'i)en 'reater freedom to either see* a chan'e in
mana'ement or auction of assets as deemed fit( 2n such a scenario/ &e can ha)e
then a suitab"e amendment in "abour re"ated "a&s to brin' them at !ar &ith
-uro!e !ro)ided if they are such a hindrance(
doc_547447246.doc
Why do we need performance in isolation i.e. labour must deliver while the management should get a bailout which should be passed to the same labour since they constitute the bulk of public. While the argument may have some weight that the USA, China and some other countries have grown out basis the same model of flexible labour and financial laws which are in favour of the management/entrepreneur, however Europe and Japan where laws and practices differ have not too badly either. It must be noted that the US and Chinese model is based on abundance of capital and infrastructure and has very disproportionate wealth distribution although it may have delivered a bit faster ‘growth’. In India with our kind of diversity, concentration of wealth in select few hands may result in political turmoil. What we may need is better labour industry relationship oriented towards performance and a strong facilitation mechanism to propel investments with liberal mechanism for takeover and amalgamations (something resisted by entrepreneurs who want protection). Our FIs have mostly supported the demand from management/entrepreneurs.
Performance Orientation and Job/Business Security
By: Amit Bhushan Date: 13
th
June
2014
he demand for re!ea" of #Draconian$ %abour "a&s is 'ro&in' by the day &ith
industry not restin' on "aure"s of its re!ea" in a state a"one( he ar'ument is an
industry friend"y "abour "a& &i"" su!!ort industry to in)est more thereby enhancin'
demand for industria" "abour "i*e the +SA or as in case of ,hina/other South -ast
Asian countries( he ar'ument can be b"and or in form of easier e.it !o"icy/
f"e.ib"e contract "abour etc( he idea is that such "a&s &i"" he"!/!ush "abour to be
more !roducti)e( 0e do not hear the same !ro1!erformance rhetoric &hen
mana'ements of com!anies &hich in 2ndian scenario is most"y shareho"din'
fami"ies are not !erformin'( he "o'ic is that it &i"" dri)e a&ay in)estments and
deteriorate in)estment c"imate or )io"ates secrecy in business(
2t is for'otten that &e do not ha)e those Draconian "abour "a&s affectin' sma""
units &here a'ain forei'n in)estment as &e"" as techno"o'y im!orts are "ibera"(
Our S3-s are sti"" shrouded in "abyrinth of dismay and not a shade of S3-s in
-uro!e( he situation is des!ite of a host of !o"icies such as S-4s and 2ndustria"
5ones and other !romotiona" schemes( 2t is the other !an's "i*e ca!ita" and
credit/ a)ai"abi"ity of !o&er/ ra& materia"s as inabi"ity to reach customers
inc"udin' the mana'ement$s commitment to business itse"f6 seem to be of a
'reater concern( he "ar'er cor!orates shou"d actua""y be facin' those )ery
!rob"ems in near"y same !ro!ortion &ith some additiona" "abour "a& re"ated
&oes/ ho&e)er the "abour "a&s seem to 'et a "ion$s share of co)era'e in media(
he same media doesn$t s!end a dime &hen such "ar'e cor!orates routine"y
see* financia" re!rie)e from 7inancia" 2nstitutions &hen "ar'e discounts in interest
and !rinci!a" credit amount is sou'ht 8&hich is routine"y !assed to ta.!ayers as
PS+ ban* *ee! see*in' re1ca!ita"i5ation and in 2ndia this is much hi'her than
say -uro!e9 or they )anish a"to'ether &ith de!ositors/ creditors and sma""
shareho"ders money( 0e a"so ha)e routine cost esca"ations in 'o)ernment
!ro:ect and the user char'es in Pub"ic Pri)ate Partnershi! !ro:ects not bein'
ana"y5ed by media &hich remains )oca" &hen it has to se"" shares and bonds of
these "ar'e cor!orates(
0hy do &e need !erformance in iso"ation i(e( "abour must de"i)er &hi"e the
mana'ement shou"d 'et a bai"out &hich shou"d be !assed to the same "abour
since they constitute the bu"* of !ub"ic( 0hi"e the ar'ument may ha)e some
&ei'ht that the +SA/ ,hina and some other countries ha)e 'ro&n out basis the
same mode" of f"e.ib"e "abour and financia" "a&s &hich are in fa)our of the
mana'ement/entre!reneur/ ho&e)er -uro!e and Ja!an &here "a&s and
!ractices differ ha)e not too bad"y either( 2t must be noted that the +S and
,hinese mode" is based on abundance of ca!ita" and infrastructure and has )ery
dis!ro!ortionate &ea"th distribution a"thou'h it may ha)e de"i)ered a bit faster
#'ro&th$( 2n 2ndia &ith our *ind of di)ersity/ concentration of &ea"th in se"ect fe&
hands may resu"t in !o"itica" turmoi"( 0hat &e may need is better "abour industry
re"ationshi! oriented to&ards !erformance and a stron' faci"itation mechanism to
!ro!e" in)estments &ith "ibera" mechanism for ta*eo)er and ama"'amations
8somethin' resisted by entre!reneurs &ho &ant !rotection9( Our 72s ha)e most"y
su!!orted the demand from mana'ement/entre!reneurs(
Perha!s a "ibera" "a& that a""o&s for easy ta*eo)er of com!anies that ha)e not
dec"ared di)idends in "ast three1four years or &here di)idend !ayout amount in
"ast 3 years is "ess than ;< of the a)era'e of 3ar*et ,a!ita"i5ation )a"ue &ou"d
do much more in brin'in' in in)estments( 2t is common *no&"ed'e that 3=A has
brou'ht more in)estments that say 7D2 8&hich the re"a.ation of "abour "a&s
see*s to brin'9( he mana'ement &ho do not !ayout di)idends because of
in)estment in rea" 'ro&th &i"" be ab"e to command hi'h !remium/ &hi"e those
&ho are stru''"in' &i"" be ab"e to 'et 'ood )a"uations( 7or non1"isted com!anies/
the ban*s shou"d be 'i)en 'reater freedom to either see* a chan'e in
mana'ement or auction of assets as deemed fit( 2n such a scenario/ &e can ha)e
then a suitab"e amendment in "abour re"ated "a&s to brin' them at !ar &ith
-uro!e !ro)ided if they are such a hindrance(
doc_547447246.doc