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Monday, March 31, 2008

Bonanza for civil service only a catch-up

IT IS raining money for key sections of the electorate. After a please-all railway budget, which actually reduced air-conditioned first-class fares, and a general budget, which, among other lollipops, wrote off farm-sector loans to the tune of Rs600bil (RM47.9bil), it is now the turn of public servants to be offered a huge bonanza.

Central government employees are now set to get a 40% raise in salaries, causing an additional annual burden of nearly Rs130bil (RM10.4bil) on the exchequer.

Since the increase is to be effective from Jan 1, 2006, the one-time outgo on payment of arrears would tot up to over Rs180bil (RM14.4bil). Millions of pensioners too would gain from the revision.

Some 5 million central government employees, including members of the armed forces, will benefit from the recommendations of the Sixth Pay Commission headed by Justice B.N. Srikrishna, a retired judge of the Supreme Court.

Also, 6 million-odd employees of 26 state governments are bound to get similar increases in pay and perks. A 20% increase in salaries of employees of all state governments will entail an annual payout of over Rs460bil (RM36.8bil).

Since central government employees are set to get a 40% raise, it is unlikely that their counterparts in the states would settle for anything less.

Admittedly, there is a good case for substantial increases in government salaries. To begin with, it was necessary to offset the sharp rise in the cost of living since the last revision in 1996.

Private sector salaries in the intervening decade had more than doubled, in some cases trebled and quadrupled given the 9%-plus growth in the economy in recent years.

Besides, the government service is no longer the preferred profession of meritorious students. Even Class-I civil service jobs, including those in the elite foreign service, fail to attract the best talents from elite universities.

The problem is far more acute in the armed forces, with the officer corps suffering a huge shortage for want of suitable candidates.

Even after the proposed rise, a substantial gap between public and private sector salaries would persist.

However, the proposed revision would help address the problem to a considerable extent, especially when one considers that government service virtually offers life-long job security and post-retirement pension, health care etc, perks generally unavailable in the largely unorganised private sector.

A rough idea about the new salary structure of civil servants can be had from the fact that the Union Cabinet Secretary, considered the head of Indian bureaucracy, will see his monthly pay packet rise from the existing Rs67,000 to Rs103,000 (RM5,300 to RM8,200).

Secretaries to the Government of India, members of the elite Indian Administrative Service, will have their pay increased from Rs55,000 to Rs80,000 (RM4,400 to RM6,400).

A covenanted bureaucrat reaches the level of the secretary to the GOI after 30 or so years of service and very often spends about a couple of years in that position before retirement upon reaching the age of 60 years.

The pay commission has also fixed the minimum entry-level salary at Rs6,600 (RM527) a month as against the existing Rs4,400 (RM352). The minimum-to-maximum salary ratio has now been pegged at 1:12.

Notably, the existing salaries actually show the basic plus 50% dearness allowance, which gets automatically merged with the former after a certain period.

Also, the number of salary grades are to be reduced from the existing 35 to 20.

As for the armed forces, the chiefs of the three services will see their pay packets go up from the existing Rs30,000 (RM2,400) to Rs90,000 (RM7,200) while the starting salary for lieutenants (or equivalent in the navy and air force) would go up from Rs14,000 (RM1,100) to Rs25,200 (RM2,000).

At the level of the sepoy, the starting salary scale of Rs5,000-Rs7,000 (RM400-RM560) is set to rise to Rs10,670 (RM853).

However, a recommendation which is bound to prove most unpopular with government servants it that pertaining to a cut in the number of gazetted holidays.

The Commission has recommended that these be abolished altogether and, instead, only three national holidays, that is, Republic Day on Jan 26, Independence Day on Aug 15, and Mahatma Gandhi’s birthday on Oct 2, be allowed.

Meanwhile, at the popular level there is near unanimity that in spite of the handsome increases in their pay, there would not be any improvement in the quality of governance.

Ordinary Indians are certain that corruption, sloth, and inefficiency will continue to dog governments even after public servants get higher compensation, a challenge which no pay commission can tackle, especially given the virtual cast-iron job security.

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