The Hike Report

Proposing a 40 hike in salaries, the Sixth Pay Commission has taken a leaf out of the private sector book to introduce performance-related incentives but has rejected...

Proposing a 40 hike in salaries, the Sixth Pay Commission has taken a leaf out of the private sector book to introduce performance-related incentives but has rejected the argument for parity between public and private sector salaries. It has cited studies and discussions to argue that several factors, including prestige, job-security, pension, allowances and perks, outweigh the salary gap.

The commission received a large number of representations, particularly from Group A officers, highlighting disparities between salaries in the government and those in the private sector and arguing that this led to reduced attractiveness of the Government as a career option and a decline in the quality of intake.

Extensive discussions with heads of training institutions, the panel8217;s report says, found that this contention had no sound basis 8220;as the compensation package has not made any significant impact on quality of intake which has remained consistent over the years.8221;

The commission8217;s key conclusions:

8226; According to a study by the Xavier Labour Relations Institute, commissioned by the Pay Panel, compensation provided by the Government is higher at Group C and D levels, marginally high for Group B employees and only substantially higher for Group A officers in the Government. The study also revealed that 8220;merely comparing salaries without taking into account the total package of allowances and benefits available within the government, especially the value of pension and the value of job security provided, cannot be undermined since they form major components of the total package.8221;

8226; The Government provides 8220;unparalleled variety and job content,8221; along with a much wider canvas of operations than the private sector. 8220;The prestige involved in working for the Government and the opportunity of making a contribution to national policy or its implementation8221; are other aspects which add an unquantifiable value to Government jobs.

8226; Job-related stress is 8220;significantly lower8221; in the government and work schedules provide a 8220;more favourable work-life balance.8221;

8226; In the private sector, the Cost To Company CTC may not actually be a reflection of the take-home pay, as a major proportion of the CTC consists of variable pay which is based on performance. Further, high-starting salaries as projected in the media and other reports are granted only to a minuscule number who are the best students of top-end management schools and, at times, are not reflective of the industry average.

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8226; Grant of extremely high pay packages in certain sectors maybe a result of the demand for talent at the time of initial setting up of an industry or during the boom period. 8220;Such episodic events should not be used as the yardstick for comparison, as ultimately higher salaries in these sectors get normalized over time.8221;

8226; The main consideration in the private sector being 8220;profit,8221; an equal comparison with the Government is not going to be ever possible as any increase in the resources of the Government needs to be primarily directed towards development.

However to bridge the gap vis-agrave;-vis the private sector to some extent, the Commission says it has recommended a higher starting salary for Group A posts and called for giving the Government flexibility to offer a 8220;market-driven salary8221; to highly qualified scientific and technical personnel whose skills are in demand in the private sector.

This higher package, the report says, will be accompanied with a fixed-term contract which could be altered based on performance. Further, taking into account the fact that a large portion of the salary in the private sector comes from performance-related payments, the Commission has recommended introduction of performance-related incentives in the Government.

6TH PAY PANEL CALLS FOR

Rs 12,561cr Annual extra fiscal cost this year

Rs 4,586 cr Projected annual savings

Rs 18,060 cr One-time expenditure on arrears

35 Pay scales replaced by 20 grades across four pay bands

The Bureaucrat

Cabinet Secretary EXISTING Rs 67,000 PROPOSED Rs 103,000

Secretary EXISTING Rs 55,000 PROPOSEDRs 90,000

Additional Secretary EXISTING Rs 48,000 PROPOSED Rs 70,000

Joint Secretary EXISTING Rs 46,500 PROPOSED Rs 60,000

Minimum salary at entry EXISTING Rs 4,400 PROPOSEDRs 6,660

The Soldier

Army/Air Force/Navy Chiefs EXISTING Rs 30,000 PROPOSEDRs 90,000

Sepoy EXISTING Rs 5,000-7,000 PROPOSEDRs 10,670

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Starting Salary for officers EXISTING Rs 14-16,000 PROPOSED Rs 25,200 Lieutenant and equivalent

Colonel posted at peace station with 26 years service EXISTING Rs 27,000 PROPOSED Rs 52,700

Army Commanders EXISTING Rs 26,000 PROPOSED Rs 80,000

New Military Service Pay 8211; Officers get Rs 6,000, Jawans Rs 1,000

Perks, allowances across the board

Most allowances doubled; fixed allowances to be inflation-proof City Compensatory allowance subsumed in transport allowance and raised by four times 40 increase in pension; higher pension levels for retirees/family pensioners at the age of 80, 85, 90, 95 and 100 years.

Women employees get staggered working hours and enhanced maternity leave of 180 days; disabled get transport benefits Child education benefit hiked from Rs 600 to Rs 12,000 yearly

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National Holidays down to 3, Gazetted holidays abolished, restricted holidays to be raised from 2 to 8.

Instead of advances and loans at 6 from government, civil servants now get a 2 interest subvention on loans

Performance-related incentive scheme to replace Ad Hoc bonus and Productivity-linked bonus

Annual increment to be 2.5 instead of the prevailing Rs 500;

High performers not exceeding 20 within grade to get 3.5 Travel entitlements to be paid on actuals