Events & Issues

New Delhi, 9 December 2015  

Pay Panel Report & After

PERFORMANCE CRITERIA VITAL

By Dhurjati Mukherjee

There is much discussion after the much awaited 7^th Pay Commission submitted its report regarding revision of pay for Central government employees. The recommendations are now in government hands and it is expected that a decision may be taken at the time of presentation of the Budget for 2016-17. Though this revision may be necessary after every 10 years, the question that remains in everybody’s mind is the level of efficiency in government departments, organizations and attached offices. It is difficult to believe that the upgradation of pay scales from the time market has simultaneously resulted in more professionalism in government.

As is known by now, the Pay Commission recommended an increase between 23.55 per cent from January 2016 for both serving and pensioners of Central government, thus impacting 47 lakh serving employees and 52 lakh pensioners, including defence personnel. The financial impact of implementing the recommendations will be a whopping Rs 1.02 lakh crore – Rs 73,650 crore to be borne by the Central Budget and Rs 28,450 crore by the Railway Budget – which would be anything around 0.7 to 0.7 per cent of the GDP. Odd as it may sound, the increase may not be to the satisfaction of the employees as it has not been up to expected levels, the last time this being around 35 per cent.

It is significant that the biggest gainers from the Pay Commission recommendations would be pensioners, who are expected to get over 24 per cent increase in benefits. A rough calculation shows that a pensioner would get an average Rs 65,000 more a year – an amount the person is likely to spend rather than save, which in turn is expected to fuel demand of a large number of goods.

However, the acceptance of these recommendations would set a chain reaction in public sector companies (PSUs) and specially the various State governments, where employees would also clamour for similar upgradation. As is well known, most State governments are facing debt and it would indeed be very difficult for them to upgrade the pay scales of its employees.

In fact, both the Central and State governments are facing financial crunch and the implementation of upgraded pay scales would obviously be a burden on the exchequer. The implementation of the recommendations may result in the fiscal deficit increasing and obviously this would affect development expenditure. Finance Minister Arun Jaitley’s commitment of reducing the fiscal deficit, from 3.9 per cent of GDP this year to 3.5 per cent next year and 3.0 per cent the year after may not succeed.

There is a nagging feeling that the Government may delay the increase in allowances if there is pressure on the fiscal deficit. In such a situation, pensioners would be the biggest gainers from the Pay Commission. 

An important point that needs to be mentioned is the introduction of the Performance Related Pay (PRP) for all categories of Central government employees. The Commission has been quite bold in recommending that employees should not be allowed to earn annual increments if they fail to meet performance criterion though it has sought upgradation of performance benchmark to “very good” from “good” level.

Though one cannot deny the fact that there has been some improvement in the efficiency index of most Central government organizations, the professional approach is still missing. Computerization has, no doubt, helped in gearing up the pace of work in most organizations but still a lot remains to be accomplished. Many would tend to agree that there continues to be a lack of accountability as also transparency in the Government.

The most vital point which has not been touched by the Commission – possibly this did not fall under its terms of reference -- is regarding restructuring of the Central Services. One cannot say that it is overstaffed as retirement of the last five years or so, with recruitment being very low, has made it compact. In fact, there are many divisions and/or organizations where there is genuine shortage of staff and work has been suffering on this account.

Thus, restructuring is the need of the hour to ensure that the right man is positioned at the right place. While this would take time to complete the process, it should be started immediately with specialists for some of the specialized jobs. The Government has already made a beginning with the banking sector, where one private sector executive has been hired to run a public sector bank. Moreover, areas where there is genuine shortage should be looked into while the administration should not be made unnecessarily top heavy. Departments such as commerce, environment etc. requires strengthening and need to be seriously considered.

The challenge now before the Government is to ensure that the Central Services, specially at the lower levels – Group B and Group C employees -- become tech-savvy and sincere in their work. Promptness and dedication are called for and to equip the officials the concerned departments and related offices should undertake training, including on-the-job training, at periodic intervals, preferably with experts drawn from academic bodies and private sector.

One may mention here that government officials dealing with RTI and/or grievance redressal are not properly equipped to handle these areas as a result of which people suffer. The grievance redressal mechanism in the government is quite poor and there is no attempt to follow the guidelines of the Department of Administrative Reforms & Public Grievance (DARPG) in this matter. Thus, proper training is required which certain departments prefer to ignore for reasons not quite discernible.

Another problem that has been witnessed is the reluctance of a section of officials to go out to the field for survey/scientific work or undertake transfers. The opposite sex mainly comprises this section. This attitude should not be allowed to continue as with increase in salaries and emoluments a professional approach and better work culture is the need of the day to take the country forward. 

In the present scenario, a lot remains to be done to ensure that the Government is professionally geared and capable of giving the best results. Adoption of policies geared to good governance and adherence to citizen centric attitude in implementation of plans and programmes need to be adhered to, specially with reference to various welfare programmes of the government meant for poor and impoverished sections of society. While better emoluments are definitely needed, there is simultaneously a need to gear up the administrative process and make it an agent of change. Both should go hand in hand. ---INFA

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