Decades of grappling with pay parity among administrators and employees of the companies it owns should by now have convinced the government that wages are best set by market forces, where they are in play. The way the government goes about handing out raises is quite an HR fiasco. Every pay commission brings in its wake a chorus of disgruntled voices. At the core of the State’s payroll are its 18 million employees. Their wages — because they are not engaged in maximising profits — can only be determined by pay panels. Next in line are the 2 million defence personnel, and their pay and perks must, for similar reasons, be indexed to what the babus choose to give themselves.
The clamour among the 1.4 million people engaged in running the 250-odd companies the government owns is, however, far more shrill, and needless. It should not require the spectacle of a mere 40,000 executives of state-owned oil companies bringing the country to a halt to drive home the point that public enterprises must be allowed to set their own wages. A market economy predicates labour costs principally on profits, which the 150 profitable state-owned companies are eminently capable of undertaking, as their counterparts routinely do in the private sector. The productivity gains accompany-ing market-determined wages are amply documented and perhaps the reason why pubic sector employees themselves resist them.
This suits their employer, which runs its refineries, banks and power utilities as fiefs. Wildcat strikes are a small price to pay for cheap oil, loan write-offs and free power. The government’s brinkmanship with the striking oilmen draws on a rich tapestry of industrial dispute in the country but seems a terrible waste of time when it could have been better employed in dealing with more fundamental economic issues. Like lowering the price of fuel, for which truckers are striking. The case for an immediate cut in oil prices is well made, whatever be the political dividends of making the announcement closer to elections. There is enough economic distress going around the world at this point of time. The nation could do without some of the self-imposed variety.