Was India’s liberalisation supposed to mean high disparities?  

February 24, 2012

Is there really a shortage of people in India who will work the way the employers want them to, or is it something else? The extremely skewed disparity may offer one clue—and also a solution. But as with everything else, this change too, has to come from the top

Veeresh Malik

On one level in life, I am also an entrepreneur, though currently staying away from gainful and remunerative participation in that game for the simple reason that I do not want the stress of being a businessman in India to drive me insane or kill me—or both. This gives me the freedom to let my hair down, travel all over the country by as many different means of transportation as possible with airlines as last resort, and observe the effects of trickle down of liberalisation on middle-class Indians in a, hopefully, unbiased way.

Certainly, there is no dearth of anecdotal experience that may evolve into a “long-form” report some day if discipline overtakes whimsy impulse. And if I stop losing notes scribbled on note-pads pilfered from conferences and seminars. But there are some broad generalisations emerging, which do require to be set out in shorter articles that shall, hopefully, stimulate debate, as well as correctives.

One of these generalisations has to do with the oft-repeated battle-cry in India from many, but especially from HR (human resources) specialists, and the boss-men from the larger companies who value their moans so much, as well as the small to medium level entrepreneurs who are their own HR specialists.

“There is a great shortage of trained, loyal, hard-working, efficient, good, honest, etc, etc, people in our industry.”  From unskilled labour to semi-skilled operators to truck drivers to engineers to bankers and all the way up, maybe even journalists and actors. The clarion call is repeated at every social function I attend, just around the time the second single malt (from Scotland) or dark rum (from Jamaica) is going down very well with the delicate canapés (by a French chef) on offer, then through dinner (take your pick) and continues past dessert (all 19 of them, made by an Italian) to the cheese tray (from an organic farm in the middle of Madagascar) and brandy (from Australia, so not exactly cognac, but said to be better) and then coffee (from Colombia).

Usually, somewhere in the middle of the meal, somebody will say NREGA, another person will say Bihar, and the rest will nod sagely. Me, I like to go chomp-chomp, and listen.

So, what’s the real situation though, in a country of over a billion people, many of them young, that we cannot find the right person to work for us?

The answer has been brought home to me in many different ways, many times, but all pointing in the same direction. Here are some examples:

    Two friends, both doctors from the same top medical college in India the seventies, best of breed. A few years later, thanks to Mandal Commission, they chose to leave government service. One went abroad to the US, worked for a hospital for a few years, and then set up his own clinic. The other stayed back, went into private practice, and then set up a similar clinic in India. Both are known for their work as well as humanity, and today, they use the same technologies and machines in their hospitals.

So, for a particular diagnostic machine, they have technicians who have the same qualifications and experience, too. The doctors earn very well, in fact their income in the US and India is almost the same now, and quality of life is a subject of much debate. However, all other things being equal, the factor for earnings of the US doctor/technician pair is about 5:1, while for the Indian doctor/technician pair it is about 100:1.

    I have plenty of friends in the trucking and transport business, all sizes, vehicles and companies. This includes MBAs from best of breed colleges, who have seen their own families grow from a few trucks pushed mercilessly to vast country-wide networks, with juggernauts rolling relentlessly—I have piggy-backed on some, with strict no camera no reportage requests. Here also, thanks to National Permit rules requiring two drivers at all times, and the sheer inequity in the way in which truckers are treated when away from their own areas of influence, means good drivers are not easy to come by. I also happen to have a friend from school who now owns and runs a trucking company in Western Canada, after having been a hotelier most of his life, and he has a waiting list of good licensed and certified drivers ready to work for him.

The Canadian fleet operator’s take home is about nine to 10 times what he pays his better long-distance drivers. In India, by a modest estimate, the disparity would be around 60:1 or so in a ‘good’ company. Fleet size 150-200, some owned, some ‘controlled’. The friend in Canada, incidentally, has no difficulty obtaining drivers from his native state in India, people land up to drive trucks after paying minor fortunes to agents, even selling their family land. And I haven’t even started talking about the difference in working conditions for truckers in India.

    The infotech industry was once upon a time not too long ago supposed to be the poster-child of equality and equity. Founders and mentors lived lifestyles which magazines wrote about and employee stock options, more the rule than the exception, were the order of the day from top to bottom. Top to bottom, people used ordinary cars, ate together, and generally celebrated the joint push upwards of the new emerged and evolved middle class.

Somewhere down the line, the approach has changed in the last decade or so, and the concept of ‘owners’ and ‘workers’ has been firmly established. In addition, where long-term social security was an avowed aim from many in this industry because the state sure did not do so, things have reached a hire-and-fire modus operandi in many of the new-age ‘professional’ companies. It gets worse with every passing year, as newcomers are put through all sorts of hoops and loops, and where at every point they pay for training or skill upgradation. Today, the owner of an infotech company has a disparity level with his employees, which is amongst the highest in all industries—and all this, in just about 10 years.

    Barge-owners and operators in Goa are a truly evolved lot. Emerging from close to nothing, with not much state support, a global industry has emerged out of small 500-750 tonne barges now reaching 3,000 tonnes and more, displacement. The channel in the two rivers has slowly grown from about a metre to over three metres now. Buoyage is available for 24x7 navigation. And the ship-building industry it has spawned is now top of the world in stature with offshoots into other types of working and pleasure vessels too. However, despite the reduction in business due to the Karnataka rulings, the lament is the same—there is a shortage of staff. “Our boys don’t like these jobs”, I am told as we sip vodka with pineapple juice in crushed ice on the deck of huge pleasure yachts, checking out the setting sun.

I ask my barge owner and mining friends—who, by the way, are quietly doing a great job with inland waterways in the Gangetic plains also— that what sort of living conditions do you give the crew on board, never mind the salaries? How does the change in your lifestyle reflect in an improvement in theirs? To be fair, the disparities in Goa are not as bad as in other parts of India, but there is still a lot of catching up to do in other related aspects. Maybe Goa will provide the beacon to the rest of the country—people who work also need to play, and to be able to afford to play, the employer and the state has to provide the opportunity. And the safety net.

I could go on with this list, from small shopkeepers to mid-size manufacturing companies to huge telecom giants, and all points in between, and more. The larger issue here is not salaries as part of a global structure. The larger issue here is salaries as a disproportionately small part of the kind of benefits that the new-age “maaliks” as they are called in some parts of the North or the “saayip” as they say in some parts of the South, have reaped for themselves.

The best, of course, is saved for the last. If you really want to see disparities, then check out how the servants of the people, the elected lawmakers, lead their lives. And what they pay their staff. In the course of my life, I’ve done that too, and it was an eye-opener. It has only become much wider now. As I never hesitate in telling people—if you want to really see the best cars in town, then look in the garages of the government buildings in Lutyen’s Delhi.

This disparity is what keeps the available work force down, not lack of raw material in the form of the right kind of youngsters, and that is a shame. Because, and this is the punch in the face of all of us who benefitted from the liberalisation of the last two decades—we took advantage of all sorts of tax benefits and subsidies and low-cost land and more. And then, instead of evolving into true employers with a long-term vision, many of us went back to being over-grown despots.

It doesn’t work that way. The disparities have to come down. Or, be prepared to continue to moan. And then pay to bring disparities down.

(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)