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Keep accounts in order for accountability

The terms of reference of the Seventh Pay Commission should be restricted to the improvement of efficiency. This is need of the hour. Bharat Jhunjhunwala writes.

india Updated: Oct 02, 2013 04:35 IST

The Sixth Pay Commission had given recommendations for an increase in the salaries of government employees on the basis of ‘need’. The amount required for the sustenance of a family of three persons was given. The starting salary, inclusive of DA, of a government employee today is Rs 13,300 per month. Other perks such as HRA, medical, provident fund, pension and LTC add about Rs 10,000 per month making a total of about Rs 23,000 per month. R Vaidyanathan of IIM Bangalore has estimated that government servants collected bribes of Rs 1,53,000 crore per year when the salary bill of the government was Rs 37,000 crore. Thus the non-official income of government employees is about four times their official salary. The total income of an entry level government employee may be reckoned at Rs 92,000 per month. Government employees claim this is not sufficient to meet the needs of a family of three!

I wonder how the 57 crore people in the unorganised sector are living on a monthly earning of about Rs 8,000 per month.

Officials of the Confederation of Central Government Employees & Workers seek parity with salaries paid by public sector undertakings and the private sector. The Fifth and Sixth Pay Commissions both rightly rejected this argument. Employees of these for-profit entities are accountable to the balance sheet. Government employees are recruited to serve the people hence their salaries should be fixed in accordance with the incomes of ordinary citizens.

The Fifth Pay Commission had recommended that there should be a reduction of 30% in the strength of government employees within the next 10 years. It had recommended higher salaries, in part, under the assumption that the remaining employees will have an increased workload. However the strength of government employees has reduced by a mere 10% in the last 16 years. It had also recommended that a quinquennial assessment of Group A officers should be done. ‘Remarks about integrity would be allowed in such periodical reviews by a knowledgeable group and could lead to compulsory premature retirement of the officer’, it had said. The tone of the report was this ‘knowledgeable group’ should include external persons, but this has not been implemented. The result is that government employees get paid more for their same inefficient ways.

The need is to implement measures for improving the accountability of government employees. A confidential survey of people served by Group A and B officers should be done. I was once evaluating an NGO. I sent confidential letters to all the members of the society. The replies were startling. It came out that the officials were running the NGO as their personal fiefdom and undertook no consultation with the members. Similar surveys can be done. Letters can be sent randomly to people in a district seeking their views on the performance of the district magistrate.

Similarly, an external review of the performance of all Group A officers should be done every five to 10 years. Kautilya in Arthashastra says: “Householders must be appointed to independently assess the number of families, level of production and tax collected.” A review of NGOs is usually done by donors every five or 10 years. This evaluation system should be implemented.

An independent agency under the president, chief justice of India or the lokpal should be established to catch corrupt government employees. The terms of reference of the Seventh Pay Commission should be restricted to the improvement of efficiency. This is need of the hour.

Bharat Jhunjhunwala is former Professor of Economics, IIM, Bangalore
The views expressed by the author are personal