7th Pay Commission-Increasing Divide

The Central Government has announced its decisions accepting the recommendations of the 7th Pay Commission which are expected to benefit the central government employees and pensioners raising their salaries/pensions by about 24%. While this may bring comfort to the employees immediately, in the long run, I think, implemen- tation of the Pay Commission’s recommendations is likely to increase the unrest among employees and bring discredit to the Modi Government .One thing that the constitution of the Commission by the UPAII Government and of the committee appointed by the Modi government to process its recommendations manifests clearly is that the strangle-hold of the bureaucracy over the two governments was/is complete.

The last thing that is expected of a popularly elected professedly pro-poor government is to widen the gap between the lowest and the highest earner. Yet that is precisely what has happened with the implementation of the Pay Commission recommendations. The gap between the lowest salary of Rs. 18000 and the highest salary of Rs. 2,50,000 now fixed is 13.88% whereas the existing gap is 13.13%(the existing salary figures being Rs. 15,000 and Rs. 1,97,000). The gap between the starting salary at the entry level of a class IV employee and that of a class I officer has been raised from 3.06% to 3.11%. While the lowest salary has been raised from 15,000 to 18,000 i.e. by 20%, the highest salary has been raised from Rs.1,97,000 to 2,50,000 i.e. y 26.9%. In other words, while those at the lowest level are expected to lower their living standard, those at the higher levels can enjoy higher standards.

It is unclear how the government thinks a salary level of Rs. 18,000 is sufficient for a reasonable human living for a family unless they take shelter under the even lower salaries existing now. A major constituent of cost of living is house rent. While the highest level officers are provided decent govt. accommodation at a nominal cost close to their places of work, those at the lower levels have to fend for themselves.A major chunk of Rs. 18.000 would go towards hiring minimal one room accommodation even at places far removed removed from their postings necessitating long commutes and expense thereon. These issues, which constitute hidden elements in sizes of salaries, are of course no consideration for the policy makers since adequate labour is available even at lower rates considering the population and the level of poverty. But doing so at the level of the government is nothing short of exploitation.

Another major constituent of the cost of living is health-care. Govt. has the central government health scheme,which, for a nominal contribution, entitles its employees to free medical care. In practice, however, the scheme is a torture and a farce especially for low and middle paid employees considering the heavy rush at facilities (like dispensaries) provided under the scheme . Besides such employees live at great distances from the facilities and it is impractical for them to take full advantage of the same. These facilities again serve the higher paid ones well.

Children’s education is of course free at government schools but the less said about them the better.

A popular government must consider these factors and fix the compensation for lower paid employees accordingly. Much higher rates of house rent and conveyance allowances should be fixed for employees drawing less than say Rs. 50000 pm. and not provided with govt accommodation.As regards health care, the government should review the CGHS and abolish it or make it optional with a suitable scheme for reimbursement of health care expenses.The govt may reimburse only the outdoor treatment and ask employees to insure for hospitalization etc.This may involve some malpractices but will be offset by savings in the huge establishment for the CGHS and leakages therein.

Another decision highlighted by Government while implementing Pay Commission recommendations is the doubling of the limit of payment of gratuity from 10 lakhs to 20 lakhs. This will’ however, benefit only the highly paid officers.

The thrust of the Pay Commission recommendations and the Govt decisions thereon is thus to have a strong super-structure at the top while allowing the base to crumble. The least I can say is that this is not expected of the Modi government. The lower level staff must feel that the govt. means to have a more even leveled society.


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