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Monday, October 15, 2007

Sixth pay commission will have no bonanza for babus

An  article that came in Daily News and Analysis

NEW DELHI: For over four million government employees, including military personnel, the Sixth Pay Commission may not usher in a dramatic new era where salaries are more in tune with skyrocketing wages in the private sector.

DNA has procured details of the draft salary structure that is now under discussion between the commission and the finance ministry. These indicate that even at the top-most level — the Union cabinet secretary — the fixed salary will be just about Rs80,000 per month, up from Rs30,000 earlier.

As head of the Indian bureaucracy, the cabinet secretary notionally runs India’s largest corporation of almost 3.3 million people, excluding over a million men in military uniform. His proposed salary wouldn’t be a patch on CEO salaries in the corporate sector, where annual compensation packages run into crores of rupees for even medium-sized companies.

At the bottom of the totem pole, starting salaries for Class IV employees would rise from a basic of Rs2,550 to Rs6,500 — which is the new minimum pay for anybody working in government (see table of proposed pay structure, page 24). And the jump is not as high as it seems since the new basic salary would absorb the earlier dearness allowance (DA).

DNA has learnt that the commission, headed by retired Supreme Court judge BN Srikrishna, author of the report on the 1993 Mumbai communal riots, has been forced to water down its proposals after discussions with the finance ministry showed the financial burden may be too heavy for centre and states.

The last pay commission had called for increases in pay linked to a reduction in the size of the government. It had suggested a 30% cut in total government strength over 10 years, given an annual attrition rate of around 1.5%.  This has not happened.

“There has been no effort at downsizing the government. The recommendation that salary hikes be linked to a reduction in the number of employees was never accepted, and we are left with almost similar numbers,” says an official privy to the current pay commission’s proceedings.

Says Suresh Tendulkar, eminent economist and member of the last pay commission: “It is necessary to pay better salaries at higher levels. But to do that you have to reduce the number of posts in the higher ranks. Only then can you reduce the numbers below.”