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This is an archive article published on July 21, 1997

Now monetise their perks

So an obliging Government has accepted, in large measure, the Fifth Pay Commission's generous prescription. For all its inflationary import...

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So an obliging Government has accepted, in large measure, the Fifth Pay Commission’s generous prescription. For all its inflationary import, it is hard to argue with this decision. Government employees’ salaries must have some relation to private sector earnings. If this has a disastrous effect on government finances and inflation, the answer is to limit numbers in government or to freeze dearness payments everywhere.

The Government’s refusal to raise the retirement age from 58 years has arguments both for and against.The Indian Express has weighed in for the move in the past. An early retirement age adds to the escalating pension burden on government. Besides, increasing life expectancy makes such early retirement seem like needlessly forced redundancy of an experienced workforce, with its attendant personal trauma and public loss.

The argument against and it is a powerful one is that if the outlandish number of Central Government employees can only be trimmed through attrition, then raising the retirement age is anachronistic. On balance, this subject can do with more thorough debate. Let the next Pay Commission speak.

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The most remarkably retrograde decision is the refusal to do away with overtime pay. This results obviously from nervousness about a revolt by lower-grade employees, who have made an art of wasting regular working hours to claim overtime benefits. Dismantling overtime demands spunk, and spunk is currently in short supply.

The Pay Commission was right to recommend, and the government is right to accept, improvement in armed forces pay, and especially in upgrading jawans from “unskilled” labour status. It is rather ridiculous to describe people whose job it is to put their lives on the line as skilled or unskilled labour. Far better to categorise theirs as hazardous employment and compensate it accordingly.

With the question of relative pay parity between government and the private sector hopefully out of the way — never mind unions threatening strike a pernicious vested interest must now be attacked. If government employees have been right to wail about their pay scales, the private sector has the perfectly legitimate grievance that the concealed and transparent perks of government service over-compensate their government counterparts.

A Rs-50,000 pay-cheque could easily pale in comparison to the rent-value of the government accommodation of a middle-level Central Government employee. And housing is at least a visible perk. What value is to be put on the army of staff that many use as personal servants or government vehicles which effectively serve as personal ones? What does this do for relative living standards?

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The next Pay Commission would be well advised to ask. There remains the little matter of productivity. It is not without reason that overtime is a less-heard word in private sector corridors, except where unions are particularly entrenched.

The government sector is lucky that no worthwhile studies exist in India about relative productivity in the two sectors. It could shame a lot of loud proponents of pay parity into silence. But courageous will be a government which challenges one of India’s most entrenched vested interests.

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