Ramalingam


OFFICE OF PROFIT

Recent Political Controversy In Indian Political System.

B.Ramalingam

Research scholar, Department of Public Administration,

Osmania University, Hyderabad, India-500007 .

Introduction:

A nation – wide debate is going on over the controversy of disqualification of MP’s and MLA’s on the Ground of holding offices of profit in Indian Political system. It began with the disqualification of “Samajwadi Party MP Jaya Bhachan from Rajya Sabha on March 17, 2006 with retrospective effect from July 14, 2004. After this event, leaders of different political parties performed much hue and cry. Finally Sonia Gandhi resigned from the Lok Sabha pretending the issue of morality. Very soon the controversy took a constitutional crisis and different state governments rushed to save their pillars of powers.

BACHCHAN ISSUE :

Jaya Bachchan was elected for the Rajya Sabha in June 2004. After one month she was appointed as the Chairperson of Utter Pradesh Film Development Corporation, which was an office of profit under the State government. She was given perks and other benefits as part of her job in U.P. In this way, she was holding an office of profit not withstanding her selection as the member of the Council of state very interestingly, a Congress worker from Utter Pradesh filed a complaint against Ms. Bachchan in the Election Commission. The Commission found her guilty of holding an office of profit. The President, after the Recommendation of the EC disqualified her under the Article 102 of the Constitution of India.

SONIA ISSUE :

Congress President Sonia Gandhi was a member of Lok Sabha. She was appointed as the Chairperson of National Advisory Council by the UPA government. She also held several posts under the government. Complaints were registered against her, and she chose the safe route of resignation. So that she could continue her impression of being the statue of sacrifice and morality.

The list of holders of office of profit is too long. Complaints against more than 40 MP’s are registered in the Election Commission. Lok Sabha Speaker Somnath Chatterjee himself comes within the purview of disqualification. Hundreds of member of different state legislature hold offices of profit, some how or the other.

What does it show ?

(a) Our policy – makers. Statesman, politicians, leaders and so-called stalwarts want to grab more and more power in one hand.

(b) The power loving people do not want to let the door open for others.

(c) They need money by any means, so that they could hide their black money.

(d) In an era of corporate culture of democracy, only money begets powers.

(e) In order to sustain in power, the thirst of greedy leaders can be satisfied only by giving them of faces of profit.

(f) Our political party’s, power-loving representatives and peoples leaders have lost morality, principle and dignity. They need power, they need money : but they do not need welfare of the people.

CONSTITUTIONAL ASPECTS :

Disqualification of MP’s : There are separate provisions of disqualification for the member of parliament and the member of state legislature. Article 84 prescribes qualifications of the members of parliament. It lays down that a person shall not be qualified to be chosen to fill a seat in parliament unless he

(a) is a Citizen of India and makes an subscribes before some persons authorized in that behalf by the Election Commission on oath of affirmation according to the form set out for the purpose in the third schedule.

(b) is of at least 30 years of age for the Rajya Sabha and of 25 years of age for the Lok Sabha (C) and possesses such other qualifications as may be prescribed in that behalf by any low made by the parliament.

Our Constitution clearly mentions that the parliament has the power to make a low in respect to the issue of qualification of the member. Article 102 lays down disqualification of membership in case.

(a) he holds any office of India or of any state, other than an office declared by a low of parliament not to disqualify its holders.

(b) he is an undischarged in solvent.

(c) he is of unsound mind and stands so declared by a competent court.

(d) he is not a citizen of India or has voluntarily acquired the citizenship of a foreign state or is under any acknowledgement or allegiance or adherence to a foreign state, and

(e) If is so disqualified by or under any law of parliament, it applies to the case of defection as prescribed in Tenth Schedule.

Article No.103 lays down that any dispute about the disqualification of member of parliament shall be referred to the President who will take a decision on the advice of the Election Commission and his decision shall be final. The Election Commission has a great role as the President decides the matter after obtaining its opinion and is accordance with that option and in case of disqualification on grounds of defection, the matter will decided by the Speaker or Chairman of Rajya Sabha as the case may be.

Disqualification of MLA’s and MLC’s : The disqualifications for membership in State Legislature are spelt in Article 191 which lays down.

1. A person shall be disqualified for being chosen as and for being a member of the Legislative Assembly or Legislative Council of a state –

(a) if he holds any office of profit under the government of India or the government of any state specified in first schedule, other than an office declared by the Legislature of the State by law not to disqualify sits holders.

(b) If he is of unsound mind and stands so declared by a competent court.

(c) If he is an undischarged in solvent.

(d) If he is not a citizen of India, or voluntarily has acquired the citizenship of a foreign state, or is under any acknowledgement of allegiance or adherence to a foreign state.

(e) If he is so disqualified by or under any low made by the parliament.

2. A person shall be disqualified for being a member of the Legislative Assembly or Legislative Assembly or Legislative Council of a state if he is so disqualified under the anti-defection law contained in Tenth scheduled.

Finally we may refer to Article 192 which says that if there is any dispute about the qualification of a member of the State Legislature, the matter shall be settled by the Governor whose decision shall be final and he shall do so after taking the opinion of the Election Commissioner.

LEGAL ISSUE AND OPTIONS :

To constitute an office of profit under Article 102 (1) (a) of the Constitution, Three conditions are to be satisfied.

Ø There should be an office to which an appointment is made.

Ø It should be an office of profit.

Ø The office should be one under the government.

However, the parliament (prevention of Disqualification) – act 1959 specifies certain offices, which will not come within the purview of the disqualification and several offices have been added after the enactment of the law. The office of the Minister is excluded from the office of profit. The law has been amended time and again for minor posts and for lesser mortals.

Ø In 1977, when a non-Congress party came to power for the leader of the opposition in each House was provided a Special Salary and allowances. Since that made it an office of profit. The Morarji Desai government simultaneously amended the 1959 Act to put the leader of the opposition in the exempted list.

Ø In 1992 the National Commission for Schedule Casts and Scheduled Tribes (as it was then called) and National Commission for women came into existence while the National Commission for Minorities was conferred statutory study. Within a year, the Narasimha Rao government amended the act to save heads of those three commissions from being affected by the office of profit rule.

Ø In 1999, leaders and chief whips of all recognized parties and groups in parliament were provided special facilities. The Vajpayee government simultaneously amended the 1959 act to protect them from disqualification. On September 30, 1982, the President disqualified a member of the Rajya Sabha – M.R. Mohan Rangam as he was holding the post of Special representatives of the government of Tamil Nadu in Delhi. It was taken as an office of profit.

The Supreme Court in the Shibu Soren case has made it clear that even if the holder of the office does not drawn salary, he or she will be deemed to hold an office of profit if the office carries same remuneration or pecuniary benefits.

And, now the cabinet committee on parliamentary affairs decided to convene a session of parliament from May 10 to 23 to discuss the office of profit for taking a final decision.

BIBLIOGRAPHY

1. “Prospects on Indian Government and Politics” by K.R. Acharya.

2. “Parliamentary Democracy and Legislators” by R.K. Bharadwaj.

3. “Constitutional System of the Indian Republic” by K.R. Bomswalla.

4. “Political in India” by Rajani Kothari.

5. Indian Todays

6. Hindu Editorials

7. “Indian Government and Politics” by A.S. Narang.

Websites :

www.parliamentofindia.nic.in

www.pmindia.nic.in

www.supremecourtofindia.nic.in



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Bruce

Paramantapa Dasgupta


As per wikipedia, Profit Maximisation can be defined as “…. the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue — total cost method relies on the fact that profit equals revenue minus cost, and the marginal revenue — marginal cost method is based on the fact that total profit in a perfectly competitive market reaches its maximum point where marginal revenue equals marginal cost.” Untill recently , it was generally assumed that the rational beheaviour of a firm or an entreprenuer was to maximize profits. And definitely that profit was money profit.

However , the profit maximisation hypothesis has been challenged recently and other than profit maximisation, various alternative optimization procedures have been proposed. Following are a couple of those variants:

1.Sales Maximisation Hypothesis

2.Constrained Revenue Maximisation Hypothesis

3.Secure Profit Maximisation Hypothsis

4.Growth Maximisation Hypothesis

5.Staff Maximisation Hypothesis

6.Profit Maximisation ( Through Mark-Up Price Approach)

7.Utility Maximisation Hypothesis of a Firm.

Before going further deep into those tough words , lets take some fresh oxygen and get an overall idea of the challenges against the age old Profit Maximisation Hypothesis. In the analysis of the equilibrium of a firm, the major assumption is that the entreprenuer aims at maximisation of his profits. So it’s nothing but a rational beheaviour and its just like the rationality of a consumer is to maximisation of his utility or satisfaction.

At this point, you may ask , “ If Profit Maximisation is a rational beheaviour of the entreprenuer , then why should one find out the other alternative ways to maximise Sales, Growth , Utility…and all other craps???” Yes , you are right. But partially. Why ? Lets take a closer look around.

It should be carefully seen , what does the entreprenuer suppose to maximise under Profit Maximisation principle. An entreprenuer’s income consists of two elements.

A. He gets wages for his job of routine management and overall supervision which he is supposed to pay himself.

B. He gets what is left after meeting all the explicit and implicit costs( even including his own wages).

The great economist , Marshall described the business owner’s wages of management and supervision as normal profit and the residual income as super normal profit. This means normal profits are the minimum income which the business owner must get in order to stay in a business. So , from another angle, normal profits are nothing but a kind of cost to the firm or may be a special kind of wages , which entrepreneur pays himself. Now, if we want to maximise the profit of the firm , its not the normal profit ( as its nothing but a cost) but the super normal profit.

Okies, now it has become a bit complicated . What does the owner maximise ? Normal profit? No.. its Super normal profit. Agreed.

Now lets move forward. Here the question is , how far is it true that the owner of the firm always runs after maximising super normal profit ? If you think deeply , you will find out maximising super normal profit is nothing but a short-term activity , in long run , entreprenuers rather want to maximise a “ steady flow of profits” or a “secure profit”. It’s true that the Profit Maximisation idea is valid for explaining the beheaviour of the firm which is working under perfect competition. In that case if firms get normal profit , they feel they are happy. But in case of oligopolistic market nature , where the number of firms are not so many, in that case the owners of the firm have to think about how to maximise secure profit , not super normal profit. The same thing may also happen in monopolistic competition as well. According to Prof.Rothschild , in oligopolistic nature of business , profit maximising assmuption is no longer sufficient. He asserts “ Here is both the desire for achieving a secure position as well as the power to act on his desire”.

So , we started with Profit Maximisation…then Supernormal Profit Maximisation..and after that Secure Profit Maximisation…not a bad idea. But, whats next?

As satisfaction or utility is the ultimate end which an individual aspires to get, therefore emenent economists like Prof. Benjamin Higgins, Prof. Reder , Prof. Tibor Scitovsky have rightly argued that in case of small unincorporated business firms, the entreprenuer who actually acts as the owner-manager of the firm, he may pursue the objective of maximising utility other than maximisation of profit. For him , leisure may appear as an alternative to making money profit. It’s very much true that profit maximisation does not guarantee utility or satisfaction maximisation. The more activity or work put in by the entreprenuer will mean the less leisure he will be able to enjoy. The preference for leisure must be incorporated into the analysis of an entrepreneur who is supposed to maximise his utility and this again shows the Profit maximisation may not be the sinle goal of a firm.

Great !!! So time onwards we will have to consider Utility Maximisation also.. !!!

Now , let us shift our focus from entreprenuer driven business model to manager driven business model incorporated by the global business giants. Here the total business set up is broken into small geographic or functioanl division and the entreprenuer keeps managers for each and every division. In reality, the corporate managers try to maximise the rate of growth of output or toatal sales revenue rather than maximising profit. Because they don’t know anything about the global movement of the company. Most of the cases their salaries are related to the sales revenue and for this they put their best efforts to maximise the sales revenue. Though , now a days , mostly the maximisation of sales revenue is pursued by the managers , subject to the constraint of minimum profits which they must obtain for the owners ( share holders). I don’t want to make this proposition more complicated by taking the example of Employee Stock Option plans where the managers may think themselves as the share holders and they go for both Sales Revenue Maximisation ( for their performance related salaries) and Super Normal Profit Maximisation ( to earn more money from the sompany shares).

Do you like to take another look into this ? There is a notion that the corporate managers aim at achieveing satisfactory rate of profits rather than maximising profits. According to this hypothesis , one can say that the corporate managers set a minimum standard of performance and that can be described as the minimum aspiration level. And in the day by day operation, a manager always wants to optimise this minimum aspiration level , not to maximise profit.

Enough of taking and making hypothesis. Lets take an example of one empirical study. This was done by the famous Oxford economists , Prof. Hall and Prof. Hitch. They interviwed around forty entreprenuers on pricing policy. From their empirical study, they have come down to a conclusion that the businessmen do not try to maximise profit by equating marginal cost with marginal revenue, which they seldom know. According to Prof. Hall and Hitch , businessmen charge prices to cover their avarage cost of production and so they add profit mark-up to fix the prices of their products. And most of the time the busienssmen aim to maximise the mark up , and not the profit, directly.

In the present days, inside the corporate giants, there is a seperation in the outlook of managing business between ownership managers (i.e. share holders) and business managers. Specifically for the business managers there is a trade-off between sales maximisation and maximisation of personal utility or leisure. And to cover up the trade off ,recruting more sub-ordiante staff is the one of the best practices. Which leads to another activity i.e. staff maximisation. If one business manager recruits more sub ordinates so he can distribute his work load amongst them so to some extent he may optimise his personal utility or leisure. On the other hand recruting new a staff will increase the sales oriented revenue stream so it will maximise sales but may not maximise profit.

So , in this way we can come to a conclusion that , in today’s era , profit maximisation may not be the best business optimisation process. There are many other proven optimising factors like sales, mark up price, staff , utility , growth, secure profits etc.



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Learning to train that inner voice can be frustrating and tedious. However once done is worth it because you put your success beliefs and habits on autopilot.  The root is belief, you must believe that you can do it!  If you do not in the beginning you can borrow the beliefs of others who have done what you want to do.  Each day you could choose one of my articles and study it, they tell the story of my journey through this process.

In the beginning when you become aware of what your inner voice is telling you and you realize that it may not a belief or habit that is doing you any good; you will know it is time to change.  Start with something small.  As a child I was told over and over and over again that I was clumsy.  That belief was ingrained very deep in me and even to this day pops up occasionally, thank goodness it is a lot less often than it used to be.  One specific thought that would come up was when I was walking down stairs; I would have the thought of falling and hurting myself.  Now the voice that comes up when I am walking down stairs is “I am graceful and walk the stairs with ease”.  Remember you cannot change all your bad habits at one time, start with one and be consistent.

In the center of your success is you, You are the product and you have to be responsible for your inner voice.  In order to accomplish this you MUST be persistent.  Saying things like the devil made me do it is just an excuse, ultimately it is you, your responsibility.  No one can get inside your head and think your thoughts for you.

No one can make the decision to eat the second piece of chocolate cake but you.

As you master each new skill(s) new challenges will present themselves.  But good for you because you have already mastered the first level therefore you have a good foundation on which to build the next one.  Remember this is a process, just like learning how to walk you must go through all the steps.  A shortcut will destroy your foundation In the rooting process.

Being skeptical is the sign of a champion.  You can learn all the skills in the world, if you do not have the desire to win you will lose.  This process is simple but it is not easy, you will be required to put in the work required.

Four traits that you can adopt now that will assist you in controlling that inner voice so that it works for you instead of against you as you build your home based business

accountability

focused

belief

inspiration

What every you accept and believe will determine your behavior and your behavior determines your achievement.  Therefore when you continue to think bad thoughts about yourself and others you will achieve bad results.

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