In an attempt to signal that reforms are on track and the Congress-led alliance is committed to trimming expenditure, Finance Minister P Chidambaram may offer a second voluntary retirement scheme (VRS) for central government employees.
In February 2002, the NDA Government had announced a VRS package to downsize the Government by trimming its strength by 10 per cent in four years. The response to the offer, made to employees identified as "surplus", had been unenthusiastic, though public sector organisations, including banks, had some success in implementing VRS packages.
Though the VRS proposal is likely to attract flak from Left parties, a firm indication to go ahead with the plan may be available in Chidambaram's budget, to be presented next week. The scheme, this time around, will probably be offered to all employees.
The modalities of the new VRS offer will be worked out only after holding consultations with employees' unions, trade unions affiliated to political parties and the UPA Government’s allies, sources said.
Finance Ministry officials said that the Government had several options to slash administrative flab. The first is to reduce the retirement age of central government employees from 60 to 58 years. The second option is to offer VRS on a purely voluntary basis.
{{/usCountry}}Finance Ministry officials said that the Government had several options to slash administrative flab. The first is to reduce the retirement age of central government employees from 60 to 58 years. The second option is to offer VRS on a purely voluntary basis.
{{/usCountry}}A third alternative that has apparently been discussed is to allow central Government employees to work for up to five years in the private sector.
VRS is seen as the least controversial option with the UPA allies. Once the Centre takes the initiative to cut expenses, several states may follow suit.