Private sector salaries for Govt employees?

BONANZA FOR BABUS: CNN-IBN panel debates on 'internal brain drain' and why Govt loses out on talent.

          

ibnlive.com is on mobile now. Read news, watch videos
be a Citizen Journalist. Log on to m.ibnlive.com NOW!

Related Stories

• Higher pay for BSF, CRPF DGPs irks IPS counterparts

• IPS officers refuse sixth pay panel proposals

• 50 lakh employees to benefit from Sixth Pay panel

Top Headlines

Top Videos

Most Popular

• Satyam off Nifty from Jan 12 | Off NYSE too 

• Bleak future: What next for Satyam? 

• Satyam stunner: Highs and lows of Raju's career 

• Satyam's crack team | Directors shocked | Timeline  

• Pak sacks NSA | | He spoke too soon | What Pak says 

• Terror dossier: India uncovers 26/11 money trail 

• BJP avoids Advani vs Shekhawat battle before polls 

• Mumbai terrorists had British link: MI5 chief 

• One more Noida gangrape accused arrested 

• England cricket in turmoil; Pietersen, Moores quit 

• Satyam boss Raju admits accounting fraud, quits 

• Pak denies, India cries and the band plays on 

• Pak can't decide if India's dossier is proof enough 

• PM joins the diplomatic offensive against Pakistan 

• Choking Delhi: MCD to convert parks into parking lots 

• Trained to kill: How Kasab held Mumbai to ransom 

• Casualties mount, medical aid a far cry in Gaza  

• Day 7: Poonch gunbattle still on, 10 terrorists hiding 

• Non-UPA CMs divided over new anti-terror law 

• Slumdog... crew celebrates A R Rahman's birthday 

• Kasab is a Pakistani national: Pak official 

• Satyam stunner: Highs and lows of Raju's career 

• Satyam 'apologises', vows to emerge stronger 

• Satyam off Nifty from Jan 12 | Off NYSE too 

• Beleaguered Satyam forms crack team for fire-fighting 

• Taking stock: Nilekani on lessons from Satyam fiasco 

• How Satyam shocker hits investors, employees 

• Pak sacks NSA | He admitted Kasab's a Pakistani 

• Bleak future: What next for Satyam? 

• Satyam Timeline: How the scam unfolded 

Photogallery

Find us on Facebook | Join IBNLive community

Stay ahead with G-Talk Buddy | Click now!

A 40 per cent pay hike was recommended by the Sixth Pay Commission for all of the 45 lakh Government employees and a 100 per cent hike in the salaries of defence personnel with effect from January 1, 2006. This will entail a wage bill of Rs 30,000 crore for the government.

But is it a well-deserved payout to cope with the severe price rise or is it an election gimmick?

Should government employees receive the same salary as private sector employees?

These were the questions addressed on CNN-IBN's special primetime show Face the Nation on Monday, which was hosted by Sagarika Ghose.

The panel comprised of Director and Chief Executive ICRIER Dr Rajiv Kumar, Former Cabinet Secretary T S R Subramaniam, and COO Naukri.com Hitesh Oberoi.

Where is the Money?

The discussions began with a key question: where is the money going to come from?

Rajiv pointed out that the Finance Minister in his Budget speech had announced that he had left head room for about Rs 20,000 crore to take into account the Pay Commission recommendations.

And because it is not necessary for all of it to come out in the same year, there seems to fiscal space to accommodate the huge payout.

“The payment of this can be handled in different ways. It can be staggered, it can be given out in bonds," he said.

But the Fifth Pay Commission was called a fiscal catastrophe. The World Bank had called it the single-largest adverse shock to India's strained public finance. Now, without downsizing the government, it seems tough for the government to afford this massive wage bill.

Subramaniam pointed out the wage bill was much higher than Rs 30,000 crore. "In an election year, it has to spread to the states within six months. The total bill is going to be Rs 1,50,000 crore. The Government of India's taxes are buoyant and Chidambaram can afford it for the Government of India. Very few state governments will be able to afford it."

He also pointed out that Group C and D, clerks and chaprasis account for 92 per cent of the total. “Today, they are paid better than the market. It is only upper echelons, which are paid much lower than the market,” he added.

Subramaniam suggested using technology and downsizing Group C and D jobs to get results. He added that for a government servant, salary is only one element of the total package. “What matters is the working conditions, politics, tenure, the ability to do things at the right time at the right place. So we should not confuse administrative reforms with the Pay Commission report."

Private Vs Public

The private sector attracts good, talented people by paying high salaries. So must India pay out very high salaries in order to get the kind of governance we deserve?

“If you look at what used to happen 10-12 years ago, when government servants used to be paid as much or as well as the private sector. But today, it's very different. Today, private sector salaries are 10 times government salaries, especially at the top. So in India, people in the government are sort of overstaffed, overpaid and under worked at the bottom and understaffed, overworked and underpaid at the top. This has to change if you want the government to do well."

Many say it could mean the salaries are artificially compressed and there should be much better differentiation between top-level salaries and lower-level salaries.

But Subramaniam replied that it isn’t that the intake at the top is of inferior quality. He, however, conceded that because of the plethora of opportunities today, people have many options than earlier.

Subramaniam also cited job security as an attractive feature of government jobs. As for the salaries, he said, it was hard to match market rates anywhere in the world.