Heed India’s CEA Nageswaran: Well-paying companies would be doing themselves a favour
Live MintIn 1914, Henry Ford startled his industrialist peers in the US. He raised the wages that Ford Motor Company paid its workers to $5-a-day, twice the market rate, on the rationale that they too should be able to afford the $440 Model-T cars they rolled off its assembly lines—a factory innovation that crushed unit production cost, cracked open a mass market and whose later adoption for military hardware gave the US an edge in warfare that made it the world’s top power. Last week, India’s chief economic advisor V. Anantha Nageswaran had this message for India Inc: “The staff cost of private listed companies has been coming down. The CEA’s remarks can be placed in the economic context of weak private investment and consumption, trends that have persisted in spite of state efforts to ‘crowd in’ one to lift the other. Last quarter’s slump in output growth shone a spotlight on how heavily our economy’s expansion still depends on the state as its big spender.
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