Budget & 7th Pay Panel


By Vinod Sharma


Expectations among our bureaucracy are at an all time high vis-à-vis the presentation of the general Budget on 29 February. The day, when Union Finance Minister Arun Jaitley is expected to announce a budgetary provision of Rs 1.11 lakh crores for implementation of the 7th Pay Commission Report recommendations and the One Rank One Pension (OROP) scheme which is being considered by the Empowered Committee of the Secretaries before the final nod by the Cabinet.

Recall, unlike the 6th Commission set-up in July 2006 which was implemented only in 2008, the erstwhile UPA Government constituted the 7th four-Member Panel headed by Justice (retd) A K Mathur in February 2014 to encash it in the May general elections.

But the report, submitted in August 2015 only saw light in December last, perhaps to allow the NDA Government make alterations/deletions due to the OROP announcement along-with keeping it within budgetary constraints.

Pertinently, since Independence a pay commission is set up every 10 years to review and recommend the work and pay structure of the civil and military workforce of the Central Government.

In keeping with the practice the 7th Report recommended a 23.55 per cent increase in salary, allowances and pension to benefit approximately 47 lakh employees and 52 lakh pensioners totalling an additional outgo of Rs 1.02 lakh crores every year.

True, this amounts to merely a little over 2 per cent growth annually in pay and allowances of an average Central Government employee, who is facing rising inflation, less promotional avenues, tough working conditions and having to compete with hefty pay packets in the private sector thanks to due globalization.

Undeniably, the financial impact of the 7th Pay Commission is staggering for the Central and State Governments. Already, post implementation of the 5th and 6th Commission, the Centre’s annual wage bill crossed a whopping Rs 10,000 crores and Rs 8,000 crores respectively. Thereby, breaking the back of India’s developing economy with many States unable to pay staff salaries.

Arguably, the impact of a further increase in salaries and allowances, even if it is a moderate 23 per cent, will impose an additional wage bill of Rs 1.2 lakh crores on the Centre alone.

It remains to be seen how the Government will square this bonanza with the commitment to eliminate revenue and fiscal deficits to make the economy flourish. As it stands, Jaitley has proposed to lower the fiscal deficit at 3.5% of the GDP and 3% in the2016-2017 budget from the present 4.1%.

According to experts, the Budget outlay for implementation of the pay panel and OROP would account for 0.5% of the GDP. But the additional financial burden on States would be more staggering. This would force inordinate delay in States implementing the pay panel’s report on the pattern of the Central Government.

Therefore, in the pre-Budget consultations with the Finance Minister, his State counterparts have strongly pitched for additional grants to square up the burden.

Notably, as statistics show the Union Government’s total workforce is around 47 lakhs, of which over 30 lakhs are in two major sectors, Railways and Defence. The rest are scattered in over 500 Ministries and Departments across the country.

Moreover, both Railways and Defence employees’ services are not only of paramount important but also indispensable as Railways is the backbone of the national economy, besides being the biggest revenue earner for the Government.

Similarly, defence personnel posted mostly in trouble-torn and tough areas are guarding the country’s borders and their valuable services cannot be weighed in terms of financial benefits extended to them. Not only do they work under immense stress and in highly trying climatic conditions whereby any amount of money to them would be justified. The recent martyrdom of 10 soldiers in Siachen speaks volumes about their valour in safeguarding our borders.

Besides, national security is not negotiable. Hence, the country would not be losing anything while increasing pay packets of defence employees. Instead, it would immensely add to their morale, efficiency and devotion to duty.

The general assumption that Government employees are handsomely paid and under-worked is untenable. Like the private sector, an average employee is equally devoted to his duty and is also prone to the practice of hire and fire.

However, unlike his counterparts in the private sector, a Government employee is poorly paid despite six pay commissions. With the introduction of the annual work appraisal scheme and several other performance-oriented reviews, a Government employee has no other option but to work, and, as he could lose the so-called job security.

Additionally, he is subjected to more stringent official rules and regulations. His earning from salary and other allowances is taxed at source, even as the Government fails to realize huge taxes from lakhs of big-wigs in the private sector.

Since all Government offices have introduced the biometric attendance system and with the Right to Information Act in force, the working of ‘babus’ has become more transparent and accountable. Still there is always room for administrative reforms from the top echelons of our bureaucracy; otherwise people will continue to believe that their hard-earned money is being squandered on non-responsive babus.

There is no gainsaying, corruption and dilly-dallying tactics in Government offices must be dealt with sternly so as to make the bureaucrats fully accountable to the needs and requirements of the common masses.

Clearly, there is an urgent need to generate additional funds from sources hitherto unexploited and untapped and by checking wasteful expenditures on pompous shows, luxurious foreign trips of Government employees by making sure that every penny earmarked for development is properly utilized and not squandered by unscrupulous elements in the Government and private sector. It is hoped that Government employees will get their due in the ensuing budget. —– INFA

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