19/07/2016
Statistical details of offices migrated as on 27th June 2016
A miserable 2 per cent-by vinod raj.
The Pay Commission is announced once in ten years. Thus any increase in
basic salary comes about once in ten years. Even if we were to assume that this
Pay Commission has brought about a hike of 20 per cent, it would tantamount to
a simple rate of 2 per cent per annum. Which employee in the private sector
would be content with a 2 per cent per annum hike? A couple of years ago, I was
pleasantly surprised to hear of the bonus received by one of the youngsters in
the family. I found that his annual bonus alone was more than the sum of the
total salary earned by me over my entire career! He could afford at least two
vacations abroad for himself and his kids every year, travelling business
class. My wife and I have never been on any vacation as yet. At most, every
year we visited our parents using up my earned leave or she would accompany me
if I travelled on work. For him the weekend is a total break from work—he gets
no official calls over the weekend. Mine was a 24x7 job when I could not refuse
anyone who called me. Once when my wife reminded the caller that he had called
on a holiday, he had the gumption to remind her that official phones were given
to government functionaries so that they could be contacted all the time!
There is then the fear that the pay increase will cause financial difficulties to state governments. True, it will. However, prudent financial management requires constant mobilisation of resources. However, considering the fact that we have just about an election every year, to local bodies or state legislatures or the general election, very few governments can take appropriate measures to increase taxes or tap methods to raise resources. If you cannot take harsh decisions to raise resources, why blame government employees who get a paltry increase of 2 per cent per annum?
I acknowledge that government employees are not the most popular guys. To a large extent, we are to blame for this. This perception needs to be addressed and only we can do that with our own endeavours and actions. However, if the general public still continues to grudge the paltry increase, they must realise that if you pay peanuts you get only ..........!
Former comptroller and auditor general, Rai is chairman of Banks Board Bureau.
www.theweek.in/columns/vinod-rai/a-miserable-2-per-cent.html
Statistical details of offices migrated as on 27th June 2016
A miserable 2 per cent-by vinod raj.
Illustration: Bhaskaran
On June 30, headlines across newspapers were on the
Union government having approved the Seventh Pay Commission recommendations.
The Economic Times headline read, "Central staff hit pay dirt: An early
Diwali". The newspaper said the government had accepted the
recommendations doling out 'hefty' pay hikes. The salaries were expected to
increase in the range of 14 per cent to 23 per cent. The bold fonts also
announced that the lowest salary was to increase from Rs 7,000 per month to Rs
18,000. The highest salary, received by the cabinet secretary, was to go up to
Rs 2,50,000 from Rs 90,000.Sounds huge, does it not? But we need to analyse this. What is the bonanza
and what are the hefty pay hikes which are speculated to be “fuelling
inflationary pressures"?Actually, the salary of Rs 7,000 and Rs 18,000 are not comparable. The
equivalent of the Rs 7,000 basic salary, which was fixed 10 years ago and currently
applicable with the dearness allowance added on, is Rs 15,750 (Rs 7,000 basic
plus 125 per cent DA). In the salary of Rs 18,000 now announced, the DA is
subsumed. Thus, a more accurate comparison would be the present salary of Rs
15,750 and the new salary of Rs 18,000. Similarly, the cabinet secretary at
present receives Rs 2,02,500. The newspapers also announced that the total
outgo as a consequence of the hike was expected to be Rs 1 lakh crore.The comments on social media are more expressive! They question whether
government employees actually deserve higher salaries: "Being paid more
for what?", "More pay for less and less work", and "Babus
don't deserve a hike." In fact, it is speculated that these increases will
fuel inflation. Another school of thought believes that it will kickstart
spending, thus generate demand and hence increased economic activity.
The Pay Commission is announced once in ten years. Thus any increase in
basic salary comes about once in ten years. Even if we were to assume that this
Pay Commission has brought about a hike of 20 per cent, it would tantamount to
a simple rate of 2 per cent per annum. Which employee in the private sector
would be content with a 2 per cent per annum hike? A couple of years ago, I was
pleasantly surprised to hear of the bonus received by one of the youngsters in
the family. I found that his annual bonus alone was more than the sum of the
total salary earned by me over my entire career! He could afford at least two
vacations abroad for himself and his kids every year, travelling business
class. My wife and I have never been on any vacation as yet. At most, every
year we visited our parents using up my earned leave or she would accompany me
if I travelled on work. For him the weekend is a total break from work—he gets
no official calls over the weekend. Mine was a 24x7 job when I could not refuse
anyone who called me. Once when my wife reminded the caller that he had called
on a holiday, he had the gumption to remind her that official phones were given
to government functionaries so that they could be contacted all the time!Illustration: BhaskaranThere is then the fear that the pay increase will cause financial difficulties to state governments. True, it will. However, prudent financial management requires constant mobilisation of resources. However, considering the fact that we have just about an election every year, to local bodies or state legislatures or the general election, very few governments can take appropriate measures to increase taxes or tap methods to raise resources. If you cannot take harsh decisions to raise resources, why blame government employees who get a paltry increase of 2 per cent per annum?
I acknowledge that government employees are not the most popular guys. To a large extent, we are to blame for this. This perception needs to be addressed and only we can do that with our own endeavours and actions. However, if the general public still continues to grudge the paltry increase, they must realise that if you pay peanuts you get only ..........!
Former comptroller and auditor general, Rai is chairman of Banks Board Bureau.
www.theweek.in/columns/vinod-rai/a-miserable-2-per-cent.html