India must refrain from curbing remuneration

The level of remuneration awarded to Indian executives should be determined by market forces, according to a leading business organisation.

The Associated Chambers of Commerce and Industry of India (ACCII) has urged the government to resist implementing executive pay curbs, which it claims would limit the ability of corporations to attract the best talent.

In a survey conducted by the industry lobbying firm, 60 per cent of respondents maintained that salaries must not be regulated to achieve a higher rate of economic growth in the south Asian country's burgeoning economy.

The ACCIA said in its remuneration report: "Essential ingredients for it would be employment of the best talent in corporate world whose salary package have to match the prevailing best in all parts across the globe."

These comments follow the recommendation made by Salman Khurshid, corporate affairs minister, over the weekend that business stop paying "vulgar" levels of executive remuneration.

He suggested that a period of austerity in the country - caused by this summer's drought and the global economic crisis - needed to be replicated in executive structures.