Published On: Thu, Oct 1st, 2015

Seventh Pay Commission should think about better pay to root out corruption

New Delhi: Corruption is rampant in many of the central government’s offices, despite Prime Minister Narendra Modi’s warning on August 15, that corruption was eating away at India “like a termite”.

Seventh Central Pay Commission Chairman Justice Ashok Kumar Mathur

Seventh Central Pay Commission Chairman Justice Ashok Kumar Mathur

Accordingly, the Seventh Pay Commission should consider to root out corruption in the Indian bureaucracy and the government official system.

50 lakh central government employees and 56 lakh pensioners including dependents will receive increases in basic salaries and pensions of between 30% to 40% in the next fiscal.

It is agreed with the Seventh Pay Commission that a salary and pension increase are warranted, but think it is long overdue to start taking a more systematic approach to revising pay and pension rates for central government employees and pensioners.

The central government constitutes the Pay Commission almost every 10 years to revise the pay scale and pension of its employees and often states also implement the Pay Commission’s recommendations after some modifications.

Hence, 10 years Pay Commission awards create uncertainty and bring inflation risks, it only belatedly acknowledges large rises in the cost of living and the benefits to staff of this increase, will soon start eroding.

It is in the interests of both the tax-payer and government employees, for the central government to take a more systematic approach to revision of the pay of central government employees in periodical intervals.

A better policy would be for the commission to review salary rates at least every two years and to adopt a formula linking salary increases to changes in inflation and to improvements in productivity and revenue gains.

A rational evidence-based approach would also bring the benefit of providing certainty and improving planning for future budgets.

In the longer term, it will also make it easier for the government to move towards a system that enables government officials to be paid wages which are at least comparable to, if not competitive with, the top private sectors.

Such a move would help to start countering the criminally extortionate mind-set which embeds corruption in many government posts as a way of mitigating low wages. Better-paid staff are more motivated in performing their jobs well and in working to root out corruption.

Implementing such an approach to government employees salaries has been shown to work very well in countries such as Singapore. If we are to emulate this here, the government also needs to take a more rational approach to managing is resources.

This would allow the government to pay, recruit, and retain higher quality government officials and begin to root out corruption and poor quality in public services, once and for all.

TST

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