Why 7th Pay Commission's 'miserly' hike is understandable
The central government is well aware of the fiscal trap pay hike largesse portends.
The
33 lakh-strong central government employees are peeved with what they
perceive to be a niggardly increase granted by the 7th Pay Commission
vis-à-vis the earlier pay commissions and accepted with alacrity by the
central government.
The government though has averred that it is
“not appropriate” to compare the increase in minimum pay suggested by
the 7th Central Pay Commission with that of the previous commissions.
According to the 7th Pay Commission, the real increase given in 1996 and
2006 in minimum pay was 31 per cent and 51 per cent.
As compared
to that, the commission recommended an increase of 14.29 per cent. In
concrete terms, the minimum salary has been hiked from Rs 7,000 per
month to Rs 18,000 per month. The central government employees want it
to be fixed at Rs 26,000 per month (Source: India.com).
The
central government is well aware of the fiscal trap pay hike largesse
portends, given the real and grim possibility of state government
employees making a clamour for parity with central government salaries.
A
Hindu report, however, takes a more charitable view of things when it
says that data compiled from multiple sources, including a 2008 official
survey, Right to Information applications, media reports and the 2011
Census shows that India has 1,622.8 government servants for every
1,00,000 residents. In stark contrast, the US has 7,681. The central
government, with 3.1 million employees, thus has 257 serving every
1,00,000 population, against the US federal government's 840.
But
then comparisons are proverbially odious. The US outdoes India in most
government norms including judge-to-population ratio. While it is
desirable to emulate the US, practical considerations including the size
of the Indian population and the absolute number of employees make it
veer towards caution.
Any egregious hike by the central government
would have a precipitous impact not only on its finances but also on
states, many of which are BJP ruled.
The central government is
only following the template it laid down for itself when it boldly
addressed the festering problem of the armed forces. While agreeing to
one-rank-one-pension (OROP) norm in principle, it stood its ground and
remained firm on ensuring this parity only every five years as against
the unreasonable demand of every year.
At Rs 93,231 (Economic
Survey report) for 2015-16, India’s per capita income for a month
translates into an abysmal Rs 7,769 as opposed to what the central
government employees have been offered - Rs 18,000. Mind you, the
national average hides an inherent skew - the unorganised sector workers
intuitively must be getting only half of the national average.
The
point is the central government cannot be gung-ho about pay increases
for employees coming under its jurisdiction given its ripple effect, in
so far as similar demands from state government employees as well as the
justified heart-burn it would cause among other employees especially in
the unorganised sector.
Time was when public sector bank (PSB)
employees got considerably more than central government employees. But
successive pay commissions appointed by the central government have
upset the PSB employees’ applecart. The sad truth is the central
government pays out of the seemingly bottomless coffers of the
consolidated fund of India whereas banks have to pay from their revenue
and are answerable to their shareholders.
In any case, when the
base is already large, further increases necessarily will have to taper
down and be incremental. The 2006 increase of 51 per cent was indeed
egregious. An encore of it in 2016 was just not possible.
As an
aside, it must be pointed out that the central government job is no
longer a cushy one, what with a demanding Prime Minister snapping at
their heels. They are for the first time feeling the heat of the private
sector motto - work hard, party hard.
