Monday, March 30, 2015

What central government employees can expect from the 7th Pay Commission

Sounds odd, but the highest paid Indian bureaucrat till 1959 was the railway  board chairman and not the cabinet secretary. The top rail bureaucrat, who was  earlier called chief commissioner of railways, drew a basic salary of Rs 3,250  per month, a smart 8.3% more than that of the cabinet secretary, the senior-most  bureaucrat in India. But as the fortunes of Indian Railways dwindled over the  years — its market share in freight movement has shrunk from 90% in 1950 to 30%  now — the clout of the rail bosses and their corresponding rank and pay have also  slipped.

Today, the railway board chairman and eight other top rail  babus receive a salary equivalent to a government of India secretary, a scale  which as many as 230 Indian Administrative Service (IAS) and 40 Indian Police  Service (IPS) officers also draw. For good measure, the cabinet secretary now  not only draws a higher salary than the railway board chairman, his superior  rank comes with betterperks including a bungalow at Prithviraj Road located in the heart of Lutyens'  Delhi.

Meanwhile, the Indian Revenue Service (IRS), a 5,541  officers-strong cadre responsible for collecting direct taxes in India, now  claims that IRS should get better pay and perks than IAS. The entry-level salary  for all Group A Central services is the same now, but thanks to two more  increments and faster promotions, IAS  maintains an edge over others. The basis for this claim? "Today, IRS — not IAS — is the revenue collector for the government. So, it's logical that the edge given to IAS should be given to us," says Jayant Misra,  Income-Tax  commissioner and general secretary of IRS Association. In a  58-page-long  memorandum to the 7th Central Pay Commission (CPC), which is  now examining a pay  like for Central  government employees, the IRS  Association argued that the primary reason for  higher pay to the Indian  Civil Service (ICS) of the British era and its successor service, IAS, was that they were revenue  collectors. But now, the dynamics have changed, they claim.
IRS has argued that the net direct tax collection has grown 9.35 times between  2000-01 and 2013-14, an impressive piece of statistics in the backdrop of only  5.4 times expansion of GDP during the corresponding period. Also, the cost of  revenue collection in India is one of the lowest in the world, which according  to IRS officers is yet another reason for demanding a good deal from the CPC.  For every Rs 100 they collect, the tax department spends merely 57 paisa. In  percentage terms,  the cost of revenue collection in India is 0.57% as against 1.58% in Japan,  1.35% in France, 1.17% in Canada and 1.05% in Australia.

Welcome to the behind-the-scenes manoeuvring before the Big Sarkari Pay Hike.  With a new pay scale for 36 lakh Central government employees, and also  pensioners, likely to come into effect from January 1, 2016, the officers and  non-gazetted staff of various services have been lobbying hard to get a good  deal from the 7th CPC. Unlike in the private sector, the pay hike in government  is a once-in-10-years-affair, making every CPC, right from the first that  submitted its report in 1947,a hugely powerful agency. No doubt, government employees have to undergo an  annual appraisal process called Annual Performance Appraisal Report (APAR), but  that exercise is important only for promotion, and not for any pay hike.  Government employees do get a regular hike in dearness allowance, a measure  meant for offsetting inflationary pressure on their earnings, but at the end of  the day it is the CPC that fixes the bureaucrats' pay for 10 long years.

That's precisely why officers and staff of every service can't afford to ignore  the CPC. Constituted in February 2014 under the chairmanship of retired Supreme  Court judge Ashok Kumar Mathur, the 7th CPC has an economist and two bureaucrats  as its members. Most of the employees' associations have already had at least  one round of talks with the Commission. And some are waiting for Round II.
The Ripple Effects
A cursory glance at the memorandum  submitted by IPS  Central Association on behalf of Indian Police Service (IPS) will throw light on  the importance attached to a pay commission. The 137-page memorandum, a copy of  which was reviewed by ET Magazine, is well designed and comparable to any  standard report prepared by a global consultancy firm. PV Rama Sastry, an  Inspector General of Police at National Investigation Agency (NIA) and secretary    of IPS Central Association says the memorandum is the result of intense  in-house research, factoring in the macro environment of growth, development,  equity and justice vis-a-vis the role of a police officer. Though Sastry is the  spokesperson of 4,720 IPS officers, the memorandum prepared by his team  encompasses the role and needs of 30 lakh police personnel across India out of  which 10 lakh come under the gamut of the pay commission. As the CPC  recommendations are often accepted by the state governments as well, the remaining 20 lakh police personnel too may  eventually benefit.

The IPS memorandum has  quoted a number of reports to suggest that the tough life of a cop justifies the  demand for a fatter hike. For example, it has quoted articles published in two  journals — Global Journal of Medicine and Public Health and International  Journal of Pharma and Bio-Sciences — to conclude that one of two cops in India  suffers from sleep disturbances and anxiety whereas chances of cardiovascular  problems increase by 38% after a person joins as a police officer. Among  other demands (see What it Expects), IPS wants better life and health insurance  cover, an overtime allowance and also a new perk called allowance for  "un-social" hours (for duty between 8 pm and 6 am).

Railway officers too cite round-the-clock work demands as a reason for better  salary. "A railway officer may be called to join duty any time during the night.  The pressure always remains as it's a 24x7 work," says RR Prasad, an Indian Railway  Personnel Service officer and secretary general of Federation of Railways  Officers' Association. The Indian Railways is a gigantic organisation with over  13 lakh employees, 16,000 of whom are officers. Both the officers and staff  associations have made their representations to the 7th CPC. The officers want  non-gazetted staff to get their dues but they demand the proportion of the pay
of the lowest and the highestpaid employee should increase from current 1:12 to 1:18.

To  be sure, a formula towards pay parity has been the hallmark of the last few pay  commissions. A government entry-level peon now gets a monthly pay of Rs 14,000,  if dearness allowance is factored in. Similarly, a mid-level government driver's  monthly salary, including allowances, is Rs 30,000, at least two times that of  his counterpart in a private sector company. And that's why the salary gap  between the lowest and highest paid government servant has drastically decreased over the  last three decades.

The pay commissions have also reduced the disparity among the officers of  various services. Till the late 1980s, an IAS officer used to receive a salary that's 25% higher than  that of a Group A service officer. Today, the pay for all officers, at least at  the entry level, is same. But IAS and Indian Foreign Service (IFS) officers  still maintain an edge over others as their empanelment process (a step to get  higher posts) is much faster.
Balancing Act
An IPS officer can become a joint  secretary to government of India only two years after an IAS of the same batch  can reach that level. Similarly, there has been a nine-yearlong gap in joint  secretary empanelment between IAS and IRS, something many services claim is a continuation of the British legacy. Today, IAS officers at the level of deputy  secretary and director at the Centre constitute about only 13% of the total  officers. But as the hierarchy goes up, the percentage of IAS vis-a-vis others also rises. For  example, 75% joint secretaries to government of India belong to IAS and IFS, and  the percentage of IAS and IFS goes further up to 95 in case of government of  India secretaries.

"The edge that the IAS has must continue. Why will a person join the IAS after  quitting a job in HSBC Bank if that edge is missing? IAS officers have work  experiences at Tehsil, sub-divisions, district, state and Central government  levels. We interact with the political executives at all levels. IAS should  remain a premium service," says Sanjay R Bhoosreddy, a joint-secretary-ranked  officer and secretary to IAS (Central) Association.

On its part, the Indian Economic Service (IES) which has a cadre strength of 511  officers, represented in 55 Central government departments, has demanded parity  in pay, perks and promotions of all services, including IAS, so that the  "officers deliver what they have been employed for rather than fret over their  pay and promotion prospects".

The question is how far the 7th CPC will go in changing the pay and associated  service conditions like empanelment and promotions. IAS officers have pulled out  a 1991 Supreme Court judgement (Mohan Kumar Singhania and Others vs Union of  India and Others) where it was said that other services should not approach the  pay commissions and attempt to change the rules of career progressions and push  for a case for parity with the premier service. But other services are  continuing their demand for pay parity and also for the creation of more departments where the  IAS can't dictate. At present, only three major ministries — railways, external  affairs and post — are not headed by IAS but run by their own cadres. Now, IPS  wants a new department of internal security headed by a cop and IRS wants a  separate direct tax department headed by a taxman.

Will the 7th CPC venture into such nuances? Or will it, like the past few pay  commissions have, adopt a simple formula of Multiplier 3 under which the basic  salary is hiked by three times or more depending on the economic health of the  nation. If that is the case, it won't be too hazardous to make a prediction: A  secretary to government of India will get a basic monthly salary (excluding DA)  of Rs 2.4 lakh (current basic salary multiplied by three) and the cabinet  secretary Rs 2.7 lakh from January 1, 2016. And, yes, perks, DA and other allowances will be  extra.

Source : http://economictimes.indiatimes.com/