- Raghu Dhayal
The Seventh Pay Panel
report should press for the rationalisation of government salaries and
making bureaucracy leaner and more efficient.
The four-member Seventh Central Pay
Commission, led by former Supreme Court Justice Ashok Kumar Mathur, will
soon come up with its recommendations to determine a salary structure
for central government employees. As always, the salary structure is
supposed to be linked to “the need to attract the most suitable talent
to government service, promote efficiency, accountability and
responsibility in the work culture, and foster excellence in the public
governance system”.
Salaries in government must perforce be
benchmarked to the income of the general population as also those of
private sector employees. According to a World Bank survey, the average
salary of a government employee in the UK during 1995-2000 was £19,000
per year – 1.4 times the average income of British citizens. This ratio
was 1.0 in Indonesia, 1.2 in China, 1.4 in the US, 1.5 in South Korea
and so on. The average annual income of government employees in India on
the other hand was as much as 4.8 times the average income of the
Indian citizen.
A disproportionately liberal remuneration
package in comparison with the private sector generates an unhealthy
clamour for government jobs and distorts the labour market. The
bureaucracy also enjoys a plethora of perks such as residential
bungalows, cars, a retinue of personal staff and so on, all of which put
additional burden on the state exchequer.
An obese and unwieldy bureaucracy is the
single most pernicious malady afflicting governance. It clogs the
channels of communication, leads to delays, diffusion of responsibility,
and spiralling costs. Foreign investors find it harrowing to do
business in India on account of what Arun Shourie calls multiple silos
in which ministries function, thereby creating a sclerotic system.
Thanks to regular cadre restructures and
inter-service competition, the bureaucracy has seen a steady expansion.
In 1947 the number of secretariat departments at the Centre was 18.
Today, the number of Secretary level officials is over 150. There are as
many Additional Secretaries or equivalent, not to speak of a battalion
of Joint Secretaries. The authorised IAS cadre strength now exceeds
6,150 – up from 1,230 in 1951.
In the corporate world slimming a
workforce by a tenth of its size is standard practice. Why shouldn’t
governments do it too if needed? Sweden and Canada have done it and yet
managed to retain effective public services. In 1993 then US President
Bill Clinton had laid out a blueprint aiming at reducing the federal
work force by 2,52,000, designed to bring about a savings of $108
billion over a five-year period.
Recommendations of the Fifth Central Pay
Commission (CPC-V) had included a 30% reduction in government jobs over a
period of 10 years; reduction of the number of Secretary level posts
from 90 to 30; abolishing 3,50,000 vacant posts; pruning the current
five to six administrative layers to not more than two; functional
multi-tasking and so on. But these recommendations got a quiet burial.
The Indian state today has a lopsided
staff structure. Ninety-five per cent of its employees belong to
categories ‘C’ and ‘D’. In most states, almost three-fourths of all
government employees are parasitical support staff such as peons,
chowkidars, drivers and clerks. Nothing has really happened on CPC-VI’s
recommendation to phase out Group ‘D’ staff, most of whom are unskilled
and sometimes even illiterate.
Government today needs more specialists,
fewer generalists. Several senior positions can be better filled by
short-term contracts, enabling lateral entry of technocrats,
professionals and entrepreneurs to supplement and strengthen a system
dominated by the general elite.
Pay panels impose no small burden on the
country’s finances. The central fiscal deficit under the impact of
CPC-VI jumped from 2.5% in 2007-08 to 6.5% in 2009-10. Post-CPC-V, the
annual wage bill of central government employees rose from Rs 21,885
crore in 1996-97 to Rs 43,568 crore in 1999-2000. Likewise, state
governments’ expenditure on salaries increased from Rs 51,548 crore to
Rs 89,813 crore during the same period, compelling 13 states to seek
central help to pay staff salaries.
Again, post CPC-VI, and between 2007-08
and 2013-14, the annual wage bill of central employees more than doubled
to Rs 1,15,000 crore. The wage bill of government staff in the states
jumped to Rs 2,86,000 crore from Rs 1,36,000 crore. A World Bank study
revealed that “employees have effectively captured control over state
spending in health and education, and diverted most of it to themselves
through salaries, with negative consequences for service delivery”.
While the aam admi – the peasant, the
stone breaker, the daily wage earner, the rural landless, the urban slum
dweller – toils, these entitled babus take their place in government
for granted. No hearts should bleed for privileged government employees
battening on their inflation-indexed dearness allowance installments.
Is the Seventh Central Pay Commission listening?
The writer is former Managing Director, Container Corporation of India
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