A MISERABLE 2 PER CENT -
ARTICLE BY SRI. VINODH RAI ON 7TH CPC
(Former comptroller and auditor general, Rai is chairman of Banks Board Bureau)
On 30,
headlines across newspapers were on the Union government having
approved the Seventh Pay Commission recommendations. The Economic Times
headline read, "Central staff hit pay dirt: An early Diwali". The
newspaper said the government had accepted the recommendations doling
out 'hefty' pay hikes. The salaries were expected to increase in the
range of 14 per cent to 23 per cent. The bold fonts also announced that
the lowest salary was to increase from Rs 7,000 per month to Rs 18,000.
The highest salary, received by the cabinet secretary, was to go up to
Rs 2,50,000 from Rs 90,000.
Sounds huge, does it not? But we need
to analyse this. What is the bonanza and what are the hefty pay hikes
which are speculated to be “fueling inflationary pressures"?
Actually, the salary of Rs 7,000 and Rs
18,000 are not comparable. The equivalent of the Rs 7,000 basic salary,
which was fixed 10 years ago and currently applicable with the dearness
allowance added on, is Rs 15,750 (Rs 7,000 basic plus 125 per cent DA).
In the salary of Rs 18,000 now announced, the DA is subsumed. Thus, a
more accurate comparison would be the present salary of Rs 15,750 and
the new salary of Rs 18,000. Similarly, the cabinet secretary at present
receives Rs 2,02,500. The newspapers also announced that the total
outgo as a consequence of the hike was expected to be Rs 1 lakh crore.
The comments on social media are more
expressive! They question whether government employees actually deserve
higher salaries: "Being paid more for what?", "More pay for less and
less work", and "Babus don't deserve a hike." In fact, it is speculated
that these increases will fuel inflation. Another school of thought
believes that it will kickstart spending, thus generate demand and hence
increased economic activity.
The
Pay Commission is announced once in ten years. Thus any increase in
basic salary comes about once in ten years. Even if we were to assume
that this Pay Commission has brought about a hike of 20 per cent, it
would tantamount to a simple rate of 2 per cent per annum. Which
employee in the private sector would be content with a 2 per cent per
annum hike? A couple of years ago, I was pleasantly surprised to hear of
the bonus received by one of the youngsters in the family. I found that
his annual bonus alone was more than the sum of the total salary earned
by me over my entire career! He could afford at least two vacations
abroad for himself and his kids every year, travelling business class.
My wife and I have never been on any vacation as yet. At most, every
year we visited our parents using up my earned leave or she would
accompany me if I travelled on work. For him the weekend is a total
break from work—he gets no official calls over the weekend. Mine was a
24x7 job when I could not refuse anyone who called me. Once when my wife
reminded the caller that he had called on a holiday, he had the
gumption to remind her that official phones were given to government
functionaries so that they could be contacted all the time!
There is then the fear that the pay
increase will cause financial difficulties to state governments. True,
it will. However, prudent financial management requires constant
mobilisation of resources. However, considering the fact that we have
just about an election every year, to local bodies or state legislatures
or the general election, very few governments can take appropriate
measures to increase taxes or tap methods to raise resources. If you
cannot take harsh decisions to raise resources, why blame government
employees who get a paltry increase of 2 per cent per annum?
I acknowledge that government employees
are not the most popular guys. To a large extent, we are to blame for
this. This perception needs to be addressed and only we can do that with
our own endeavors and actions. However, if the general public still
continues to grudge the paltry increase, they must realize that if you
pay peanuts you get only ..........!
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