Sunday, October 28, 2007

Interview of Justice B N Srikrishna Chairman CPC

Justice B N Srikrishna, Chairman Sixth Central Pay Commission has givev an Interview to the magazine 'Gfiles' which is exclusively devoted to the 'Babus' published by . We have got permission to reproduce this interview for our readers.

"Shape up or Ship Out is our Mantra, Chairman Sixth Pay Commission Justice B N Srikrishna "

Q. What terms of reference were provided to the Sixth Pay Commission?
A. Our terms of reference were to focus on good governance as also to ensure the bureaucracy can be spruced up to provide cutting edge administration. We would be interested in seeing how these qualities can be achieved in the day-to-day administration of the country. Our objective is to effect rationalization of existing structures and work out a pay package that will promote efficiency and productivity.

Q. What is the methodology being used by your team?
A. We believe performance should be incentivised. While we are not depressing pay or giving negative performance incentives, the approach of this Commission is that most of the growth in emoluments should come in form of performance related incentives that are over and above the normal pay. The underlying idea is that good performances must also carry pecuniary reward. Any growth in the compensation should come on account of better productivity. All future growth should be attributable only to better end results with non-performers being denied any growth. Shape up or Ship Out is our mantra. We are presently working out the parameters on how such a policy can be implemented.

Q. This will obviously cause a lot of heart burn?
A. Rewarding performers will inspire employees to perform better which can only result in better delivery for the common man. Only non-performers will be unhappy with such a dispensation. With the right incentives, the bureaucracy can be enthused to give ever improving results. The question to be asked is why a private company provides results whereas this is not the case within the government. We keep talking about making India a super power with growth rates exceeding nine per cent. To bring this about, every aspect of the nation needs to gear up to achieve these results. We cannot have a BMW engine attached to a khatara gadi. I’m an optimist. I believe ki yah kyoon nahi ho sakta hai.

Q. A performance mantra for the central government employees is bound to impact the state government employees also?
A.This is bound to have a ripple effect on state governments also. The State governments should also benefit in terms of better delivery as they cannot give, give, give all the time without expecting better performance. What this will translate into will be more discipline, more conscientiousness and extreme accountability from their employees. The employee must be able to account for every rupee that the government spends.

Q. Is the Sixth Pay Commission going to advocate a hire and fire policy for government employees?
A. The terms of appointment of existing employees cannot be changed to their disadvantage. What the Government can do is to adopt a contractual approach for hiring of government employees for specific jobs at certain levels. It is a logical corollary for ensuring better performance that needs to be looked at. The spirit of competitiveness in the world of trade and commerce must be introduced in governance.

Q. How will contract jobs work for defence service officers?
A. I am not suggesting all government servant jobs should be made contractual. I believe that many posts can be identified for contractual appointment, especially at a higher level or those requiring special skills. It does not imply that majority of posts would be on contract but that for some top level posts above a certain level Government should have the choice of the best talent available.

Q. How much more will the recommendations of the pay commission cost the exchequer? The public are fed up of government servants being paid more and more for non-performing?
A. The successive Pay Commissions have increased salaries of the employees. We believe that every rupee being paid to central government employees is coming out of taxes being paid for by the common man. Each time they received a pay hike, the taxes go up accordingly. Every time a small section of society is placated, the man-on-the street (who pays for this) is going to get upset. Hence, any increase should result in better delivery to the common man. We are working towards achieving this end. We are also trying to ensure that the additional burden on the government is well within its means. We are also well aware of the fact that Central employee salary hikes are bound to have a spiraling effect on state governments who will also be forced to increase salaries even though some of them are already (financially) in a bad shape and are facing deficits. The impact of our recommendation on State governments is also included in our Terms of Reference.

Q. Most of their money is spent on paying salaries?
A. The exact proportion would vary from State to State. As per the information available with us, out of 20 State following the Central pay scales, 14 States are in a comfortable fiscal position. If the citizen gets every rupees worth, we are working towards an ideal government.

Q. Where are the states going to raise the money from?
A. These recommendations are not binding on the states. Infact, these recommendations are not binding on the central government – it is within their discretion to accept or reject. Pressure from the unions forced the government to further enhance salaries beyond what had even been recommended by the Fifth Pay Commission. That is one of the main reasons why states like Kerala and Maharashtra went in the red. Maharashtra has just recently managed to come out of its deficit.

Q. Are government pay scales going to be made at par with private companies?
A. There is the general expectation that government pay scales be brought at par with salaries in the private sector. It will not possible to match private sector salaries. Boys coming out of school are getting salaries of over Rs one lakh per month and more. We have to look into this whole issue to see how much parity we can achieve.

Q. There is a strong rumour that salaries of government secretaries going to be made Rs one crore and more?
A. (laughs) I don’t think too much credence should be given to rumours. All sections are demanding a substantial increase (in salaries).

Q. Has the Finance Ministry instructed you to work within the framework of the budget or will your exercise end up being open-ended?
A. We have to keep the financial implications of our recommendations in mind. What is the comfort level of the Finance Ministry going to be ? Can they afford our recommendations or not. There is no point in recommending an increase of Rs 50 when all they can afford is Rs ten.

Q. You must be facing pressure from all quarters to increase salaries. How are you coping?
A. There is no doubt that everybody wants a larger slice of the cake – the question of course is just how much more can be given. I’m working with a team of efficient people who are doing most of the work. I guide them wherever it is necessary in that sense it is not very different from judicial work. Wherever there are conflicting interests, I step in to try and hold the balance.

Q. By when do you expect to make these recommendations?
A.The Sixth Pay Commission recommendations should be out by next March-April.

Q .If government employees have contractual jobs, how will they receive pension benefits?
A. Persons on contract would be entitled to a higher compensation package and not to pension for the contractual period. Those employed prior to 1/1/2004 would continue to get pension. Those employed on or after 1/1/2004 will continue to be governed by the New Pension Scheme.

Q. India is a complex country with different political interests. Do you see your recommendations actually being put into action?
A. My job ends the day I submit the report. I am looking at the whole situation objectively and on that basis will make my recommendations. How the government puts these recommendations into action is not a concern of mine.

Based on this interview in the 'Gfiles', the Yahoo Business News has also made a news article. Read it here.

Monday, October 15, 2007

Taxmen want corporate salaries

Encouraged by an unprecedented 40% growth in direct tax collections, the income tax officials have sought salaries at par with corporate sector from the Sixth Pay Commission.

"In order to have the best minds in public sector the pay scales and perquisites should be at par with private sector" income tax employees said in their representation to the pay commission, which is expected to submit its report to the government early next year.

Referring to high salaries of tax officials at international level, the IT department officials said though a well-paid bureaucracy may not eradicate corruption, it would certainly remove the perceived feeling of discrimination.

"There is no full neutralisation in respect of HRA anywhere in the country" the IT officials said. They have also reportedly asked that annual confidential reports be made open documents.

Sources said over 60 Class-I officials have already left the IT Department, which is facing shortage of staff due to restrictions on recruitment and unremunerative salary packages in comparison to the private sector.

The officials who left government service to join private consultancy firms or corporates are earning more than double the salaries then their counterparts in the department.

Although Finance Minister P.Chidambaram has announced one per cent incentive to the tax employees out of tax collections over and above the budget target, and said over 7000 posts would be filled, the IT Department is losing revenue due to shortage of competent staff, the source said.

They said though government is ready to pay better salary packages to the tax employees, it will wait for the recommendations of the Pay Commission.

Since it was hopeful to surpass the budget target of tax collection at the Rs.548000 crore in 2007-08, it would not find it difficult to pay high salaries to attract better talent in the tax department, they said.

(PTI news published in News papers 15/10/07)

Friday, October 12, 2007

Another News Item about CPC

These days Newspaper across the country, publishing News item about Six Pay Commission and its recommendations. Speculative reports about how much increase in the pay of the Central Government Employees will be as well other allowances and other effects are being continuously published. After Deccan Herald and Malayala Manorama in Kerala, its now turn of the Hindi News Papers Amar Ujala and Rajasthan Patrika. Amar Ujala has published a special report yesterday and Rajathan Patrika has published article on the same line today. These News item in Hindi News Papers only confirm various information already in the circulation among employees. Some of the Fine prints of the reports are :

  • Retirement Age is going to be 62 years
  • Basic salary will be increased by 100-150%
  • Net effect will be 30-40% only
  • Lowest salary will be more than Rs.10000
  • Government has asked the commission to give its report early
  • Child Education allowance will be Rs.200-300
  • HRA increased by 15% i.e. 45%
  • Less Government Holidays
  • Six day week office working
  • Pay of Cabinet Secretary will be One Lac

Till final report comes, you will see more and more such News Items in various news paper.

Read Amar Ujala news article at