Abnormally high profits recorded by the business entities in an economy will only worsen the inequality and will challenge the principles of financial inclusivity as they are generally the result of persistently high prices of services/goods and depressed wages.
This applies very well in Indian context aswell when few of the businesses are recording phenomenal profits in decades especially in the oil and gas industry, when the economy of the nations which contribute to the major production of crude oil is suffering from an economic turmoil.
The banking and insurance industry is also not insulated as well. When the public sector banks and insurance firms cannot clock a half of the profits registered by private players in the same grounds in percentage terms; we cannot blame bad debts and inefficient leadership as the only reasons for their below the par performance. It may also be due to the increased cost of services levied by those private players ensuring their high profits while challenging the entire principles of financial inclusivity in day light for which the banking system as a whole should act as a guardian for and which is imperative in a developing economy.
The Venuzelean example of regulating the markets by subsidising almost all essential goods and services has once again prooved to be a wrong approach aswell. But in the quasi federal system of governance in India, those in power, especially in the southern states of the country are wooing the public by susbsidies to ensure an easy path to their electoral victory and there by hampering the system.
To the best of my limited knowledge no system exists to limit the profits of a business entity to the median of the industry standards though it sounds highly utopian. But a system that facilitates those profits to be ploughed back to bolster the infrastructure development of the country as well as ensuring the wages of workers to a set standard will and can surely ensure the development of a nation in the long run.
Cheap availability of the qualified quality resources should never be a reason to pamper the capitalist dream of higher profits. If we are doing so, it is only reiterating the clichéd statement of neo colonialism.
In a country like india, which produces as many engineers equalent to the population of Switzerland, though they stand number 1 in innovation index and our position can put us to shame; it is cheaper to avail the services of an engineer than to the services of a plumber or maison. But it should not be or cannot be the reason to employ a qualified professional delivering the same quality of any one comperable with him across the globe at almost a quarter of what is getting paid for the same profession abroad. The payment should be at the least made in line with the currency parity. It may also plug the brain drain on which we make hue and cry day in day out.
The financial inclusivity happens with the concept of distributution of wealth but not through a highly subsidised system and not by market regulation of goods and services but ensuring that there is a market correction of the percapita expendable income of the citizens.
(Picture Courtesy: http://art-and-anarchism.tumblr.com/post/64854603304)
