Monday, March 24, 2008

Making Indian Bureaucrats happy

India's Pay Commission Report is out;

With poll calculations dominating the UPA government’s agenda, the more than four million-strong central bureaucracy is in for a windfall. The Sixth Pay Commission’s recommendations, given to the finance minister on Monday, could mean a revision in pay and allowances that can range from 40% to 60% if all benefits are taken into account.

The recommendations are likely to be considered soon by the Cabinet. Finance minister P Chidambaram had made necessary elbow room in his Budget speech last month, while the railway budget included a provision for implementation of the report presented by Justice B N Srikrishna.

The report is expected to be welcomed by the babus as well as defence and paramilitary employees. As reported earlier by TOI, the highest pay in the government has been pegged at Rs 90,000 for the cabinet secretary, while a secretary would draw Rs 80,000 a month. The three service chiefs would get the same salary as the cabinet secretary if the recommendations are accepted.

Although the commission claimed a 1:12 lowest-to-highest pay ratio, the biggest beneficiaries would be officers of the level of joint secretary and above, giving the recommendations a pro-IAS tilt. The benefits for other central service officers, especially at director level, are not so attractive.

The government would be pleased to offer benefits to the vast bureaucracy, seen as an important constituency. Just as farmers have a loan waiver and the middle class higher tax exemptions, the Pay Commission report is a sop for government servants. It is likely to be extended by state governments to their employees as well. Haryana chief minister Bhupinder Hooda had already promised to do so.

Ajay Shah has more.
I don't think anyone understands the impact of this on the consolidated expenditure of centre, states, local government, autonomous bodies, grant-in-aid institutions, etc.

Battling the babu raj
Including railway workers, who comprise one of the world's biggest payrolls, India's central government employs around 3m civil servants and the states another 7m. They include vast armies of paper-shuffling peons. The number of senior “Category One” bureaucrats—broadly speaking, “decision-makers”, according to Satyananda Mishra, boss of the Department of Personnel and Training (DPT), which runs the civil service—is only 80,000. And the elite IAS, which mostly runs India, numbers a mere 5,600.

Its ranks include almost all the collectors of India's 604 districts, and over 60% of senior officials and managers working in government ministries and publicly owned corporations. (The rest are mostly police and railway officers.) As the successor to the colonial Indian Civil Service—the “steel frame” of British rule, according to one prime minister, Lloyd George—the IAS was designed to perform the same unifying function. It is a national and permanent service, theoretically apolitical, and recruited and trained at the centre. Yet its members serve mostly in the states—the main exception being 600 of the most senior babus who, in Whitehall fashion, advise ministers and draft policy in Delhi.

Across India, the IAS commands both reverence and contempt. Male recruits are among India's most marriageable: more suitable, it is said, than the elite geeks of the country's booming computer-services industry. Indeed, India's recent run of 8% economic growth has if anything increased their prestige, by creating more senior positions for which IAS officers are required. This year 140 people will be recruited into the IAS from around 200,000 applicants, one of the biggest intakes ever.

Yet the steel frame has now become a serious bind on badly needed reforms. As the author of a typical recent IAS history and former mandarin, Sanjoy Bagchi, puts it: “Overwhelmed by the constant feed of adulatory ambrosia, the maturing entrant tends to lose his head and balance. The diffident youngster of early idealistic years, in course of time, is transformed into an arrogant senior fond of throwing his weight around; he becomes a conceited prig.”

What's holding India back?

Write-offs as high as an elephant's eye

No comments: