STATE FINANCES-Wages of Reform

sector, including the financial sector. Now that all regulatory measures are off, company directors and their senior executive officers can grant themselves, overnight, increases in pay and perquisites to the extent of as much as 1,000 per cent or even beyond. This is not an altogether absurd assertion: cases have happened of bright young technology or management graduates catapulting, in the first wave of 'reforms', from enjoyment of an annual level of remuneration of around Rs 50,000 to one of Rs 5,00,000 or thereabouts. No shift takes place in the real level of activity in the economy, the nation's masses have absolutely no part of the benefits accruing because of such hefty increases in earnings the rich bestow upon the rich. National income estimates nonetheless march forward, enabling the liberalisation-wallahs to proclaim to the world what miracles the 'reforms' have done to the rate of national income growth. And parenthetically, to what extent are national income statisticians cognisant of the implications of service income drifting out of the country as remittances in some form or other? In case the gains from inward and losses from outward remittances do not even out, the rate of growth in domestic product is unlikely to get reflected in the rate of growth in national income. Some old-timers will describe this phenomenon as an aspect of increasing extraction by outsiders of surplus value from the system. The cheerleaders for liberalisation will have a milder, more endearing nomenclature for the ongoing drama: the blissful integration of the national economy with the global economic system.