Old order

This government has shown a marked propensity in re-employing retired bureaucrats in high profile jobs, so it can be argued that the proposal to increase Central service retirement age to 62 from 60 is simply an extension of this philosophy to the aam sarkari employee. As of March 31, 2001 the last census, there were 3.9 million Central government employees, with the railways contributing the largest chunk 39 per cent. Legally, any change in the status of Central government employees shouldn8217;t have a fallout in states. But as the Fifth Pay Commission showed, that is not what happens. Plus, there are state-level domino effects as well. The Jharkhand government has raised the retirement age from 58 to 60. So trade unions in Bihar are already agitating for similar treatment. Kerala, it must be noted, is the one state that has bucked the trend of increasing retirement age.

The 1998 hike in retirement age from 58 to 60 in the Central services showed the increases take place because of wrong, illusive reasons holding off one-time payoffs, for example. Or because of non-reasons. Thus the proposed retirement age of 62 will also be supported by pointing out life expectancy has increased and the retirement age in developed countries is between 62 and 65. But experiences from countries with greying populations that face labour shortages can hardly be extrapolated to India. Nor will invocation of the Fifth Pay Commission which recommended the increase from 58 to 60 or the Sixth Pay Commission which may recommend the change to 62 help, since efficiency and productivity-increasing recommendations of these commissions are never implemented.

Most important, and let8217;s be blunt about this, the decision is usually taken by senior government bureaucrats who are about to retire. In serving their own interests, they mess up policy. Which is why arguments about savings on superannuation benefits 8212; around Rs 6,000 crore annually 8212; are flawed. This sum looks more than extra annual salary costs around Rs 1,500 crore. But it simply transfers the problem for future governments. Because of spillover effects, a retirement age of 62 will eventually cover most of the 20 million government employees include state, local bodies and PSEs and an additional 15 million who work for quasi-government institutions. This will crowd out entry of younger employees. That can8217;t be good surely. But it fits with the general political ethos 8212; politicians at 62 are considered sprightly young.