Should IAS be the benchmark for govt salaries?

DEBATE

No, such comparisons will not help; but we need to reward non-bureaucrats with higher compensation.

Ashok Jha
Former Finance Secretary to the government of India

The question is not whether the IAS should be the benchmark, the issue is if government officials are getting a fair remuneration

While there are different pay scales within the IAS (for example, junior scale, senior scale and so on), the IAS is not really the benchmark for salaries in the government — the benchmark is positions in government. Broadly, there are ranks of under secretaries, deputy secretaries, directors and so on, and salaries are benchmarked to those ranks. Thus, it is said that the army chief is equivalent to Cabinet secretary or a vice-chancellor of a university is equated to a secretary to the government of India. All large bureaucracies have a hierarchical structure. Once the question of equivalence in terms of hierarchy and protocol is accepted then quite obviously the salaries have to fall in line. Within the government, quite obviously, there cannot be islands of high salaries surrounded by poor remuneration.

 

The broader general question is whether salaries in the government and, hence, in the IAS have really kept pace with the other sectors and with reality. Reportedly, way back in 1896 the salary of the Cabinet secretary in India and the Cabinet secretary in Britain were identical at Rs 3,000 a month. While the Cabinet secretary in Britain had the good fortune of having his pay keep pace with inflation and the general level of salaries in the economy, the Cabinet secretary in India had the mortification of seeing his salary stagnant at Rs 3,000 over several decades till the 1970s. Even today the salary of the Cabinet secretary is about Rs 1 lakh a month, which is what an average fresh graduate from any of the lesser management institutes gets as starting pay.

It is often speciously argued that the salaries in the government are not really low if one accounts for the perks – housing, car, telephone and so on – that are provided. While the perks should be reckoned as a part of salary and the cost-to-government should be the yardstick for comparison, the fact is that all these perks and some more are provided by the private sector also.

So quite obviously there is a huge disparity between the salaries in the government and elsewhere. But because there are about 4 million employees in the central government alone, various Pay Commissions set up every decade have only tinkered with the problem as any large-scale enhancement of salaries would be a huge drag on government funds both at the Centre and in the states.

The remedy, therefore, lies in streamlining and slimming the bloated government bureaucracy. It is not widely known that out of the 4 million employees in the central government, about 96 per cent fall within categories B, C and D that consist mainly of support staff such as peons, drivers, clerks and so on. The teeth-to-tail ratio is extremely adverse, given the long tail. Why should an officer or minister have three peons? So a reduction in the numbers of categories B, C and D would appear to be the ideal solution to reduce the number of those employed in the government without adverse repercussions on productivity.

One of the peculiarities of the salary structure in the government is that the salaries at the lower levels are much higher than equivalent jobs in the private sector. There is, therefore, a clamour for jobs in government, because, apart from job security, even the pay is better.

An attempt was made by one of the earlier Pay Commissions, which recognised the problem, to reduce the number of employees in government by suggesting that all posts that were vacant for more than one year (which at that time numbered more than 300,000) should not be filled up. This along with the normal yearly attrition of about 2.5 per cent would over a period of time lead to leaner numbers. Had the government acted on this suggestion, today there would have been a reduction of about 30 per cent and, therefore, the remaining employees could have been paid much more without the government treasuries feeling the pinch.

Actions taken by the government impact all citizens. It is imperative that those manning it are capable. To attract the right sort of people, compensation should be adequate. The question is not, therefore, whether the IAS should be the benchmark for government salaries, the issue is whether government officials are getting a fair remuneration.

U D Choubey
Director General, Standing Conference of Public Enterprises

There a strong case for rewarding the skill set of the public sector with a pay-structure that is higher

Historically, the job-profile of bureaucrats or civil servants has had a respectable aura around it. However, the services of these people have been viewed in isolation from the compensation packages they have commanded at various points of time. In addition, their overall salary-structure has never been competitively aligned with market-driven forces. However, a seasoned analyst would not hesitate to point out that the single-most attractive feature of a bureaucratic work-profile is undeniably, job security.

The status and power that come with these job profiles affix immense value to the profile that more than compensates for the lack of attractive pay packages. More importantly, numerous other intangible benefits like housing facilitation, sound retirement packages, social security schemes, preferential access to government services, gradual but time-bound promotional avenues and other such invisibles make these jobs highly desirable.

On the other hand, the professional classes, most visible in the public sector, imbibe the technical attributes instrumental in bridging the gap between targets and outcomes. Hence, they are indispensable for filling the vacuum created on account of rarity of skills acquired by them. The opportunity cost of not being called on to utilise the skills acquired painstakingly doesn’t seem to be offset by the security of government jobs. In other words, the warm blanket of a secure work environment seems an inordinately high price to pay when they can be fruitfully employed in quarters, namely private and multinational companies, promising most attractive compensation packages and simultaneous growth prospects.

Besides, the investments in the form of the time and capital one undertakes while acquiring technical knowledge have to be acknowledged and rewarded with commensurate remuneration. Additionally, the nature of such skills acquired, often rare, demands a higher price tag. The whole process of gaining a superior set of skills needs adequate encouragement in the form of better, market-determined pay structure.

The government has often been at the receiving end for failing to institutionalise steps to make compensation competitive and attractive in public sector units. Traditionally, the pay structure of officials in public sector enterprises have been on the pattern of government services. With the advent of committees such as Justice M J Rao Committee on Pay Revision in Central Public Sector Enterprises, however, a fair amount of research had found expression in recommendations for reforms. Various knowledge-heads have made matching suggestions. For example, Pradip N Khandwalla, who was a director and distinguished professor at the Indian Institute of Management, Ahmedabad, has advocated a system for “Agencification of Government” and services offered thereof to do away with the conventional discrepancies of public administration by “carving out of government departments, bodies called executive agencies to carry out under competitively selected professional managers on fixed tenures, specific executive functions within a framework of policy and resources provide by the relevant minister.” The idea being, better productivity is achievable when better qualified personnel are vested with responsibilities.

A high attrition rate has plagued the public sector after liberalisation and privatisation. With the opening up of opportunities in industries earlier in the exclusive domain of the public sector, the highly skilled have become upwardly mobile, switching from public to private sector to enjoy a better, result-oriented work culture, increased exposure and learning, greater job satisfaction and attractive salaries.

Traditionally, there has been a marked lack of recognition of work in the public sector that stifles productivity. A plethora of rules and regulations make red-tapism the rule of the day, discouraging entrepreneurial initiatives. All these points sum up to present a strong case for rewarding the skill set of the public sector with a pay-structure that is not only higher but more immune to the allure of the same being offered by private and multi-national entities.

Technical personnel are a step, if not more, beyond their colleagues in the nature of competencies they offer and are better placed to fit the bill of an aware workforce. Their claim over higher compensation is valid and justified.