Annexure – III

A better understanding of the persistence of inequality in earnings can he attained by noting how things were in the past.

‘Kautilya – The Arthashastra’ translated by L. N Rangarajan, clearly states how unequal or equitable things were, as far back as 2500 years ago.

The highest government / official salary paid in cash, excluding perquisites favours and tax exemptions, was 48, 000 Panas a year and the lowest was 60 Panas a year. The salary of 60 Panas a year was considered as adequate for a family of normal size.

1. The King was the owner of all the surplus wealth of the State, so let us not consider him
2. The direct family members of the King, who had Court responsibilities, and a few (about 4) of the top advisors of the King including the Senapati, were paid an annual salary of 48,000 Panas excluding perquisites favours and tax exemptions.
3. The highest civilian officials, the Chancellor or Finance Minister were paid – 24,000 Panas per annum.
4. The other Ministers, Provincial or City Governors were paid – 12,000 Panas per annum.
5. The Magistrates and Commanders of the Armies were paid – 8000 Panas per annum.
6. Other Bureaucrats and Military Commanders – 4000 Panas per annum.
7. Doctors – 2000 Panas per annum.
8. Heads of Departments – 1000 Panas per annum.
9. Soldiers – 500 Panas per annum.
10. Teacher – 500 to 1000 Panas per annum.
11. Accountants / clerks – 250 to 500 Panas per annum.
12. Skilled artisans/ labourers – 120 Panas per annum.
13. Peons/Unskilled labourers – 60 Panas per annum.

The ratio between the highest salary paid and the lowest salary paid to Government employees was 48, 000 to 60 – i.e. 800 times. Even if you only consider the next level of 24,000 as more applicable to today’s officials/ Ministers it was then 400 times. Obviously, the ratio is a lot more reasonable today, at less than about 10 times.

The higher levels of earnings today are left to those in the Corporate sector, especially the family owned / run Corporates where the top people have ‘skin in the game’ and stand to lose a lot more than any professionals employed when things take a turn for the worse. Actually, even here the ratio today is far lower than the 800 that existed in the old days.

The problem is not in the high ratio, but in the fact that everyone is more aware of the difference today than in the past and unlike in the past is more envious about it. The solution is not to curb the higher earnings of those that create greater wealth, but to ensure that opportunity is given to all to themselves strive to attain to that level of earnings. Also, to urge and incentivize the successful, if only through Public recognition, to use their wealth to bring about health, prosperity and happiness to others around them who are less fortunate, but not to demand that of them.

Bill Gates, Warren Buffet, Azim Premji, Shiv Nadar and so many others are splendid examples of great capitalist fortunes put to social use, making the capitalism they exemplify more palatable.

As Jagdish Bhagwati says – Remember that the Calvinists (of USA) and the Jains (of India) accumulated wealth but spent it not only on themselves but also more on promoting social good.

JAI BHARAT! – JAI HIND!

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