Eleven Vidarbha farmers committed suicide in the week Dr. Singh said this, taking the number this year to 400. This sadly underscored the extreme polarity between the world of CEOs, with their multi-million incomes and glitzy lifestyles, and the peasant-farmer's grim, debt-laden, reality. This terrible polarity should shame India into corrective action.

Dr. Singh told CEOs that the "growing number of Indian billionaires," Indian companies buying multinationals, and soaring CEO compensation, all mean "you have benefited from growth …" But growth must become "more inclusive."

This was a frank acknowledgement of the skewed nature of India's post-1991 growth. Dr. Singh exhorted industry to develop "healthy respect for your workers," "discourage conspicuous consumption," employ the underprivileged, and adopt environment-friendly technologies.

Some exhortations might sound naïve, even "goody-goody." They ignore the Indian corporate sector's less-than-enlightened notion of self-interest. But the emphasis on obscenely high salaries is necessary where 40 percent of people survive on less than $ one a day.

Today, there are about 100,000 super-rich Indians with wealth of $1 million-plus. Some 100 corporate CEOs earn Rs 1 crore-plus -- several more than Rs 4 crores. CEO salaries are annually growing at 30 to 40 percent -- as against 9 percent GDP growth.

At least 194 Indian corporate employees are sitting on stock options of Rs 1 crore-plus. Some have options worth Rs 100 crore-plus -- Tech Mahindra's Vineet Nayyar (Rs 216 crores), L&T's A M Naik (Rs 165 crores), and Infosys' Mohandas Pai (Rs 134 crores).

There's a gross disproportion between these figures and the subsistence-level incomes of most Indians. But Dr. Singh's ideas have been savaged in India's mainstream media.

Many editorials have treated his warnings against inequalities as economic heresy: He's going "back to the past," and endangering "prosperity." Capping CEO salaries will "shackle private enterprise." Some commentators trivialise Dr. Singh's warning about inequalities by saying that buying Mercedes-Benz cars doesn't cause backwardness in Bihar!

Yet others say his concern about "conspicuous consumption" is a new-fangled obsession, which militates against his earlier emphasis on growth, "individual initiative and enterprise." Another writer tendentiously claims that the poor just "don't have the mind-space" to bother about how much the rich get.

Such reactions come from a standpoint that's worse than ultra-conservative. It's explicitly, vulgarly libertarian: it holds that it's wrong in principle to limit the freedom of enterprise; the market is democratic and must never be curbed. Libertarianism celebrates greed and castigates all concerns with equity and justice as "the politics of material want."

Let's leave aside for a moment the moral chasm between this and the Gandhian view of the poor as Daridra Narayan, or the respect many fine economists have for the community-based "moral economy of the poor."

The point is, libertarianism totally misrepresents the market. The market equates unequal agents (e.g. starving workers and rich employers) despite their vastly asymmetrical bargaining power.

Markets don't work spontaneously. They have to be organised and made to follow certain ground-rules. In classical capitalism, the state laid these down. It legislated the minimum wage and the working day, set taxes, regulated profits, and encouraged or banned certain activities. In neoliberal capitalism, that role is appropriated by private corporations. This undermines democratic decision-making.

Libertarians take a morally monstrous position by contending that those with vastly different starting-points (e.g. in access to property) will end up in equal places because the market is "free."

This is nonsense. Markets are normally unfree, and competition imperfect. Unequal information is available to different actors, there's unfair pricing, poor demand-supply adjustment, and other distortions.

In India, the argument for changing the direction of growth is overwhelmingly persuasive. India's post-1991 growth has produced disparities worse than during the Victorian period of mass impoverishment that Dickens described.

Economists quantify inequality by a measure devised by Corrado Gini. If the Gini coefficient is 0, it means a society is totally equal. If it 1, it's completely unequal. India's Gini coefficient is estimated at between 0.32 and 0.48, but there's unanimity that it has sharply risen over a decade. In China, an even smaller rise sets off an alarm.

India should be especially alert to distress signals: the suicide of 100,000 farmers in a decade, declining organised-sector employment, and growing social disaffection, public anger and restlessness.

There are three strong reasons for drastic correction. First, regional disparities are becoming explosive. There isn't one, but at least three Indias: rapidly growing pockets in the South and West; stagnation in much of the Centre, North and East; and regression in the Bimaru states (with Assam added). This will have disastrous political consequences.

Second, growing crime and lawlessness have come to haunt the elite, which alone benefits from neoliberalism. Crime is rooted in rising inequalities, absence of social opportunity, and collapse of the credibility of the powerful. High walls and barbed wire won't really protect the rich against crime. The only long-term solution is justice and social cohesion.

Third, the disproportionate power wielded by the corporate elite has permeated politics and government and is distorting democracy. Democracy, India's greatest achievement, can only be rescued if the elite's power is tamed. This can only happen if the rich are heavily taxed, and there is serious redistribution of the fruits of growth.

This can be best achieved through a comprehensive incomes policy, which doubles or triples wages and imposes the same level of taxes (e.g. 80 percent-plus) on the rich, which they pay in Scandinavia or Japan (and until recently paid in most Western countries.)

Dr. Singh has said sensible things. Will he muster the courage to legislate them? He unleashed the neoliberal genie. He must put it back into the bottle -- for democracy's sake.

Praful Bidwai is an eminent Indian columnist.