Behind the Hype of Hefty Increase

Recently, there has been much big media hype about two packages of the UPA Government: the loan waiver for farmers and the other one was the Sixth Pay Commission recommendations. The UPA Government, getting more and more alienated from the aam admi, sought to project these two schemes as its gift packages to the people. At the other end, rightwing ideologues, the articulate neo-liberal lobby, cried themselves hoarse that these packages were a drain on the country’s coffers and came out with gloomy predictions.

The Sixth Central Pay Commission (SCPC) recommendations are shown to be granting a hefty 40 per cent pay increase to nearly 45 lakh Central government employees. What exactly has the Sixth CPC recommended?

The existing minimum basic pay is Rs.3050. The basic pay plus dearness allowance for those in that scale on January 1, 2006 stood at Rs.5763. Now they are offered Rs.6760. This is nowhere near a 40 per cent increase.

The annual aggregate cost to the exchequer due to the pay increase is shown to be Rs.12561 crore. The CPC admits that a large savings on pensions and a small one on training will bring down the package by Rs.4586 crore and reduce it to Rs.7975 crore. But even this will vanish into thin air if the government’s gains due to reduction in holidays are taken into account.

It has avoided meeting the legitimate expectation of Rs. 10000 as minimum pay by speciously linking it up with the plight of the BPL households! And surely there is no noble objective in merging Group D with Group C. This amounts to abolition of Group D posts as Group D jobs will be outsourced.

It is falsely stated that the ratio between the lowest and the highest salaries will be 1:12. The babudom at the level of secretaries will get Rs.90000 per month plus their fancy cars and posh bungalows. The heads of IRDA and TRAI will get Rs.3 lakh per month. The higher you move in the hierarchy, the fatter will be your pay packet. And there is an undisclosed/not-fully-disclosed unlimited “pay band" for secretaries over and above Rs.3 lakh per month of disclosed income!

The loss to 38.41 lakh pensioners would be Rs.4044 crore. But the CPC, with all the cruelty at its command, offers a heavenly gift to the pensioners by prescribing that they would get higher pension at the age 80, 85, 90, 95 and 100.

Holidays have been slashed; CCA done away with; new recruits and pensioners will not get Central Government health care. They will be thrown to the insurance sharks, while the CGHS is cast aside.

There would not be any bonus. An arbitrary, subjective, budget-neutral, performance-linked incentive would be the substitute.

The Central government has accepted the concept of a minimum pay for its employees in principle. Why not the same yardstick be applied to anganwadi workers, ASHA workers and paramedics, parateachers, noon-meal workers and the like, working under various names in the Central as well as State governments? If the need for ‘parity’ between corporate salaries and senior Government employees is felt, why not parity for minimum wage earners across all sectors?

Let’s take a closer look at the SCPC Report:

The Sixth Central Pay Commission (SCPC) Report begins with a dubious reference to the Fiscal Responsibility and Budget Management Acts as if these acts supersede the largest employer’s responsibility towards its employees, the employer which is supposed to be the “Model Employer” adhering to a Fair Wage Policy. It is strange that the final report of the Sixth Central Pay Commission doesn’t even hint that these “Responsibility” Acts are more relevant to cut down more than Rs.2 lakh crore tax concession handouts to the corporates and the rich so as to silence the pink press which has already started squealing about the “unbearably huge” burden of Rs.12561 crore which in their “considered/informed” opinion is a “disaster” that would “wreck” the economy though the so-called election-eve “sops” – which the employees have rightfully earned with their sweat and toil – accounts hardly for one-twentieth of Chidambaram’s tax concessions every year.

The Terms of Reference of the Commission itself clearly says, “C. To work out a comprehensive pay package for the categories of Central Government employees mentioned at (A) above that is suitably linked to promoting efficiency, productivity and economy through rationalization of structures, organizations, systems and processes within the Government, with a view to leveraging economy, accountability, responsibility, transparency, assimilation of technology and discipline”. In order to “suitably link” the so-called “steep hike” to “efficiency” and so on, the SCPC Report would be referred to a small group of handpicked bureaucratic Shylocks from the topmost layer of Secretaries who would soon come up with their own “Charter of demands” to extract their own “pounds of flesh” from the unions/employees in the form of conditionalities: and the real “negotiations” would start armed with ESMA and reactionary court decrees!

The SCPC’s recommendation of ‘de-layering’ should not be mistaken as some de-bureaucratisation. This is only to drastically cut down the promotional avenues of the hard-working employees. The existing 35 pay scales have been replaced by just 4 “running pay bands” containing 20 “grades” – new arbitrary categories. The exalted Secretaries have been placed in an altogether different new scale as they above all are entitled for unlimited riches! Adjust the so-called “hefty” hike with the eliminated opportunities for promotion, and the hike would not look as hefty as the bonanza which the top layers got. In other words, if you eliminate layers in a running scale, you will run into very unpleasant surprises!

The hypothetical 40% is the maximum one can possibly get in terms of total emoluments including superannuation and all other indirect “benefits” (like what they call “total cost to the company” in the private sector) after replacing the rule-based (legally-bound contract of negotiated wage agreement uniformly applicable to all under all circumstances) with a discretionary “Performance-based Incentive” system very difficult to measure and subject to the discretion of bureaucrats and a patron-client system based on their munificence.

The V Pay Commission recommended a 20% hike but the UF Government had bowed before the employees’ assertion and agreed to a 40% hike. The V Pay Commission also recommended 50 percent DA merger with the basic pay which however was done only belatedly in April 2004. In any calculation for fresh pay increase supposed to commence from Jan 1 2006, the basic pay reckoned should include this 50% DA merger of April 2006. For some reason, the SCPC has chosen not to include this April 2004 DA merger in the pre-revision basic pay to arrive at this magic figure of 40 percent hike! It is for the employees to calculate how much they have been robbed off as the government did not really stick to the 40% benchmark for pay increase on the actual pre-revision pay scale but fraudulently excluded the merged DA into calculation to arrive at this Magic 40/Manipulated 40! And how much more they would have got if the SCPC had really taken a 100% pre-revision pay scale including the 50% DA merged in April 2004 as the base for calculating 40% increase and recommended such an increase!

The Fifth CPC recommendations were implemented sometime in 1996 and the SCPC should have been constituted well before 2001 and new revision in pay scales should have come into effect in 2001 as the Fifth Commission itself had said that its recommendations were valid for 5 years, and it also recommended a constitutionally-mandated permanent pay commission whose new recommendations/pay revisions would be automatic. But the SCPC recommendation would come into effect only from Jan 1, 2006. That is, after 10 years instead of five. If you adjust the partly notional and partly manipulated 40% increase for this real loss, where would be this mythical 40%? It would in fact be less than 20%! The SCPC itself (2.2.18) explains that the annual increase for the lowest three pay bands would be 2.5% a year. Even if worked out at a compound rate for 5 or 10 years, and calculate the net percentage increase in salaries for employees and the per capita increase for each employee in absolute terms per month, this 40% would drastically come down to reveal this cruel joke of a “hefty” 40% hike!

Rationalising the bloated government bureaucracy is an altogether different agenda; why make the “Rationalisation” of the irrational bureaucracy the central agenda of a “Pay” Commission? To whom is the Pay Commission ‘pay’-ing obeisance?

Performance-related Incentives and Variable Increments are nothing but stratagems to pit employee against employee and drive them into hard, piece-rated slave labour without commensurate remunerations.

Flexibility is another anti-employee device. Flexiwork will mean that the employees would be at the beck and call of bureaucrats. The SCPC talks of flexibility across the pay bands which means the “chosen ones” would jump over the heads of others making a mockery of the principle of seniority and institutionalise favouritism! Worse still, “flexibility in appointments” is well-known – it’s what the BJP-run governments are already practising with the appointment of RSS elements in key posts. And the worst of all “flexibility” – lateral movement between public and private sector – signifies a higher form of PPP (Public-Private Partnership!); the government employees would henceforth do the bidding of Tatas and Ambanis and Uni Levers and Microsofts through “flexible lateral movements”.

The Terms of Reference to the SCPC themselves call for “harmonising the Central Services with the demands of the emerging global scenario.” What does this mean? The Report is wilfully blind to the global scenario in which the Indian government employees are getting lesser than what many of their Sub-Saharan and SAARC counterparts are getting. Indian wages are not to be harmonised with global wage standards but only with the rulers’/imperialists’ version of globalisation.

The SCPC talks of the “capacity of the Government to pay” but how come this “capacity” never crops up when corporates get their bonanza in terms of tax concessions? The Terms of Reference also unjustifiably invokes the principle of the capacity of the State governments to pay, to decide the pay scales of Central government employees, as if the fiscal imprudence of the States are due to “high” State government salaries patterned after the SCPC’s recommendations. The actual fact is the salaries of the employees of well-performing and financially viable States would henceforth be constrained by the SCPC stinginess. More than that, the SCPC has cleverly compared the pay scales of some select low- and medium-pay PSUs and cleverly avoided the so-called “high-wage islands” or categories of PSU employees like ONGC, EXIM Bank etc., and even ignoring the fact that the pay scales of some PSUs are already so low compared to the private corporates/MNCs that they have suffered more than 70% “attrition” rates in high-skilled/high-qualification categories!

While the Capacity to Pay is supposed to be very limited, the Capacity to Squeeze the employees is apparently unlimited! The enhancing of the Capacity to Squeeze comes packed in many attractive/high-sounding words like making the bureaucracy into a “modern, professional and citizen-friendly” entity but the Terms of Reference themselves made is amply clear that this is not a Pay Commission but a Restructuring Commission mandated to “rationalise” the bureaucracy by squeezing out their sweat and blood in a very “rational” manner.

In fact, the SCPC Report says that they were duty-bound to link the pay package of the employees with not only rationalisation but also with “simplification of systems and processes” (as if employees’ salaries had any bearing on bureaucratic systems!),
For fixing need-based minimum salary at the entry level, the commission has taken the consumption unit (family) of new entrants at three – far below the average household size in the 2001 Census.

Legitimisation of fixed-term contracts is the in-thing. The whole lot of government employees can be reduced to the status of contract labourers/para employees like ASHA or anganwadi workers with this single stroke. Though the point 1.2.6 of the SCPC Report talks of it “for selected posts, particularly those requiring high professional skills”, it has not categorically limited this fixed-term contracts to such posts only. Nor has it set out who would decide such recruitment, at what level and for what posts. The existing employees can also be converted into such fixed-term contract employees with a lollipop of salaries comparable to the private sector, with the clear proviso that such employees would “not be entitled to any other benefit”. The legendary job security of government service would be a myth henceforth.

The SCPC “assures” the employees that they would retain the existing option of two-promotions in 24 long years of service – average one promotion after 12 long years of stagnation/condemnation to the same scale with the limited satisfaction of limiting running scale at the same level – but there is no assurance the “promotion” means the next pay band as it could be the next grade in the same pay band as well and hence only marginal increase in pay benefits. Band-aid in place of higher pay band!

The apparent “concession” of relaxation of 33 years of service as eligibility for 50% last pay is nothing but a green signal to kick out employees under VRS well before 33 years as that is a major deterrence for opting for VRS at present. As with the whole SCPC Report, this specific also comes as a small carrot to facilitate the big stick! A very generous concession of a higher rate of pension has been offered by the SCPC to the retired employees after they cross the age of 100!

The hikes in transport allowance and wards’ education allowance are supposed to be “realistic” [1.2.22]. But the SCPC has cleverly avoided scores of suggestions for linking them with routine quarterly fuel price increases, or even fee structures fixed by the governments for private professional courses, travel distance and so on.

Not just privatisation but corporatisation of “certain” unspecified services has been recommended/virtually mandated by the SCPC in Point 1.2.23!

After giving a banal and selectively one-sided account of fiscal position at the Centre, the SCPC speaks of state finances and gives projections on the possible impact on the States without any recommendation on making it mandatory for all States to implement the same SCPC recommendations on pay hikes from the same cut-off point of Jan 2006. If States are in a mess the pay increase chances of Central employees should also be messed up.
The employees’ movement must beware against those who persuade them that the Report is a “good package with some bad aspects.” The report itself underlines the holistic nature of the recommendations. In spite of the media hype and euphoria, in spite of the noise over the “hefty” package, the fact is that a bullet cannot have “good” and “bad” sides! 

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