Time for an appraisal

The new commission should review the experience of the Fifth Pay Commission, before venturing to announce its award. It would be sensible to recall the fiasco of its predecessor.

While welcoming the decision to constitute the Sixth Pay Commission, it would be sensible to recall the fiasco of its predecessor, which was, in the World Bank’s opinion, “the single largest adverse shock” to India’s strained public finances. The new commission should review the experience of the Fifth Pay Commission, before venturing to announce its award. Prudence and the needs of maintaining the fiscal health of our economy demand this.

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The goals of pay commissions are two-fold -- to keep some kind of parity between the salaries of government officials and the private sector, as well as to recommend ways to enhance the efficiency of the babus. The explosion in salaries in the private sector after the Nineties’ reforms led to demands for sharp hikes in government salaries. The Fifth Pay Commission decided that this was best done by allocating more money for salaries. In order to boost the efficiency of government, it also recommended reducing its size by 30 per cent and the abolition of 350,000 vacant posts. But trade unions and a weak-kneed government ensured that the commission’s monetary recommendations were revised upwards, and its recommendations on reduction of the size of the government were junked. This led to enormous fiscal turbulence and brought many states to near bankruptcy. No one objects to the idea of paying government servants more, though most would argue that the time has come to delink government salaries from the stranglehold of the Indian Administrative Service. All government salaries get pegged to what the IAS, which is seen as the premier service, gets. Other sections of the government -- be it doctors, scientists or engineers -- not only end up getting less than IAS officials, but are also subordinated to them. But unless the system finds a way of paying specialists in its system the salaries they deserve, navratna institutes like the IITs, IIMs and AIIMS will be unable to retain their best teachers and scientists.

Though we are all agreed that the babus should be paid better, we also know that, at the very least, half of them do little or no work and a significant chunk actually bleeds the system through corruption. There must be some way to get rid of them. For starters, the commission should ensure that they are not rewarded for the fact that they happen to be government servants. Given past experience, it would not be far-fetched to demand iron-clad assurances that monetary benefits that the new pay commission recommends are carefully sequenced with genuine administrative reform and reduction in the size of the government. Not just the Potemkin exercises that we are periodically fobbed off with.