A few days before the Delhi Assembly elections, the Union Government approved the setting up of the 8th Pay Commission to revise salaries of Central government employees and pensioners. The pay commission will revise pensions, allowances and salaries. Government employees have already started speculating about the possible hike in their salaries after the recommendations of the 8th Pay Commission are implemented from January 1, 2026. The Central government sets up a pay commission every ten years to review salary structure of government employees, and, after considering several factors such as inflation, income disparities, recommends changes to the structure. The 7th Pay Commission was formed in 2014 by the UPA Government and the Modi government implemented its recommendations on January 1, 2016. Pay commission recommendations cause massive burden on the exchequer – the 5th Pay Commission cost the government Rs 17,000 crore; the Sixth, Rs 40,000 crore and the Seventh, Rs 1,02,100 crore. But subsequent government say they cannot grudge a hike in salary for government staff in 10 years, and reason that more money in people’s pockets will mean more spend, which will eventually push economic growth. Some of the extra money will also come back to the system in the form of tax. Another reason for not faltering on forming pay commissions and implementing the recommendations is this: Government employees, whether in Centre or in the states, are a big group of people and no government can afford to annoy them. Modi government understood this logic more and took just six months to implement recommendations of the 7th Pay Commission, as against more than two years taken to implement the 6th Pay Commission and more than a year taken to implement the 5th. The 7th Pay Commission gave government employees and pensioners a 2.5-time hike in salary. The entry-level pay of Rs 7,000 was raised to Rs 18,000, and the highest salary increased from Rs 90,000 to Rs 2,50,000.
Of course, no one grudges a hike in salary of government employees; what one grudges is the fact that many of them get this hike even though they don’t do their jobs properly. You only need to visit a government office to see how inefficient and/ or corrupt most government employees are. You are expected to pay some bucks even for the regular government works such as getting different kinds of certificates made or to get benefits of different government schemes. Technology has reduced corruption a great deal and increased the efficiency of government processes but there is still a big percentage of people who continue to be corrupt and inefficient. In India, there is a certain charm around government jobs, especially among the middle-class families. Government jobs come with a promise of security and an assured hike in salary and allowances. For example, the basic salary of government staff increases by three per cent every year and the dearness allowance goes up by an average of three per cent biannually. This effective annual hike of 10 per cent may not appear too attractive as compared to the salary raises given in the corporate sector. But while the hike in the corporate sector is based on an employee’s performance, the increment in the government jobs is universal. That makes this more lucrative. It is often said that getting a government job may be difficult but losing it is almost impossible – only a miniscule percentage of government staff lose their jobs, and never for performance.
It may, therefore, be a good idea to link salary hike to performance even for the government employees. As a matter of fact, the then Minister of State in the Ministry of Finance P. Radhakrishnan told the Lok Sabha on July 27, 2018, in reply to a question that “the Seventh Central Pay Commission in Para 5.1.46 of its Report proposed withholding of annual increment in the case of those employees who are not able to meet the benchmark either for Modified Assured Career Progression (MACP) or regular promotion within the first 20 years of their service.” The question was: whether the last Pay Commission has suggested productivity linked pay hike to the deserving employees to eliminate below average or mediocre performance. There is a system of annual appraisal of performance in the government system in form of annual confidential reports which are to be filled by reporting authorities but often it is seen that no officer wants to dirty their hands by ‘ruining’ a subordinate’s ACR. Only in some exceptional cases are ACRs filled correctly. Most government employees are rated moderately and thus the ACRs don’t have any influence on the increment in salary and allowances. Even promotions are time-bound. So, there is no deterrence for mediocrity in government jobs. Even when a corrupt officer is caught red handed while taking bribe, governments delay the grant of prosecution sanction against them and thus these ‘corrupt’ officers get away with minor penalties and they continue the loot unabated when reinstalled.
One of the objectives of setting up the pay commissions is to get end disparity in salaries between the government and the corporate sector. If government is really serious about making India a Viksit Bharat by 2047, it may end the sense of security of inefficient and corrupt government employees. The 8th Pay Commissions, when it is set up, may be, among other things, given this mandate, too. Only then the hikes in salaries and pensions by subsequent pay commissions can be truly justified.
