eliminate caps on corporate pay

The recommendation to eliminate the 11%-of-profit salary cap for company directors that is currently enforced is sensible and long overdue. The JJ Irani Committee is right in pointing out that corporate compensation is best left to market forces. In the age of global deals and mega takeovers, directors' salaries cannot be held hostage to arbitrarily dictated caps by the government. In competitive times, the corporate sector needs flexibility in determining exactly how the finances are to be used in engaging resources to optimise operations and achieve the desired results, and this includes human resources. What value who brings to the business, and what it is worth in rupees, dollars or beach holidays, is a matter of internal knowledge. It may be a matter of disclosure and discussion between a company and its shareholders, but the government certainly has no locus standi here at all. The only external regulator should be the market, and the government's job is to ensure that there is sufficient competition. So, if a company mis-allots its funds, it will find itself edged out of business by firms that do a better job of it.

As for the charge that directors are 'overpaid', there is little evidence to show that any systemic imbalance has arisen out of high salaries in corporate India. In fact, there is reason to believe that companies are paying people only as much as needed to access their skills. And these vary vastly, as evident in dozens of other fields of human endeavour that get more media exposure. It is just that this variation is something that external observers are not necessarily equipped to appreciate in the corporate arena. Higher competition tends to activate the variation, resulting in divergences in pay. In such a scenario, any arbitrary cap can create an artificial imbalance that will eventually curtail corporate India's competitive advantage. This is not to argue that there is no such thing as an 'outrageous salary'; as some instances from the US have recently shown, scandals do occur, but it is the self-corrective mechanism of the market—shareholders protesting, for example—that adequately takes care of them. Corporate governance exists for a reason, and that reason is to make sure that the company serves the interests of its shareholders. Salary caps do nothing of the sort.

pak china relations

If Kashmir did not exist, say old time Indian diplomats, Pakistan would have invented it. The ring of truth in this edge is evident every time a Pakistan leader travels to a far away land and speaks at a public forum.
General Musharraff in Beijing was no different. Speaking at a policy institute in that city, the General stressed that while confidence building measures on Kashmir were all very well but the real need was to find “solutions”. He went on to equated Kashmir with Palestine in his grand geo political reflections on the state of the world.
One of the reasons why Kashmir was weighing on the General’s mind is that the China visit is not turning out too well for the him. By the standards of a summit meeting between China and Pakistan - there was painful little to show. Musharraff had a very short meeting with his Chinese counterpart Hu Jintao lasting barely half an hour. Barring a handful of Memorandums of Understanding and a soft loan of $300 million for earthquake relief and the checklist is bereft of any big gains. The general reiterated that Pakistan could be a part of the energy corridor between Oil rich west Asia and China through the Gawder port and including the Karakoram highway. However there was no real deal on this offer from the Chinese side.
One reason could be the fact that bilateral trade between Pakistan and China is worth a partly $ 4.25 billion. This is not even chicken feed in the context of china’s overall trade of $1.1 trillion. India, with $13 billion and a trade surplus with China in 2004 -2005, has three times the quantum of trade. The missing economic link in this relationship could cost Pakistan dear in the years to come
The General was hoping for much more from this visit. After all, as chief patron of Pakistan’s nuclear Program, China has been of great help in the past. It is currently building a 300 MW nuclear reactor in Pakistan. There was an expectation in Islamabad of a package of nuclear energy concessions that could match what India is trying to negotiate with the United States. The day Musharraff arrived in Beijing, the Pakistan armed forces even tested a surface-to-surface missile to press home that point.
The apparent lack of success from this visit will add to the General’s problems. He is already beleaguered at home with sectarian issues and would have liked a foreign policy success to deflect attention from those. As things stand, China while continuing to be a solid alley, has offered little by the way of fresh concessions and initiatives.