With the Seventh Pay Commission submitting its report to the government, it is up to Prime Minister Narendra Modi to decide whether to swim with the recommendations or stick to his promise of “Minimum Government, Maximum Governance” and thereby risk massive discontent. As was the case with the promise of raising minimum support prices for farm produce or bringing back black money, Narendra Modi will find it difficult to meet this commitment as well. And this is just the beginning of copycat demands from state employees, banks, and other government-owned institutions. Many of them, especially most states, are simply in no position to fork out more without cutting down on critically required social services or infrastructure development.
The taxpayers, which means most of the country, and the economy will groan at the commitment. There will also be intense heart-burning in the informal sector and most of the organised sector. Denied medical reimbursement, decent pensions, adequate salary and certainty of service, their pay increases are subject to much stringent criteria. The reality is though government staffers are mollycoddled, a substantial chunk is honest and struggles to meet the demands of a consumerist society. But the pay panel has erred by not providing special packages to doctors and teachers in view of the degeneration in the public health and education systems. Similarly there should have been extra consideration for policemen and judges.
Now that higher pay and pensions for government employees are a fait accompli, some myths ought to be busted. The economy will absorb the impact within the next two years. The arrears will not be as hefty as last time because the implementation date is January 1, 2016. But in future, the Union Cabinet must provide for constant audits of government departments, especially the ones managing public delivery of services. The inputs should be put up for the next Pay Commission’s consideration. The government sector must be answerable to the people. With the size of the government at 139 per lakh citizens as compared to 668 for the US, babus must not be allowed to have their cake and eat it too.