When finance minister Arun Jaitley said, over the weekend at the Times Literary Festival, that implementing awards like OROP or the 7th Pay Commission were at the cost of areas like irrigation or poverty alleviation, what he never explained was why the pay panel bill was so high—and why it can’t be fixed by just moving to, as suggested by the 7th pay panel chief Justice AK Mathur, an annual private sector-like exercise. While no one will grudge paying a top government banker or a Secretary more, most government jobs comprise the lower grades where salaries are already 3-4 times that of the private sector. Most people know the government pays a lot more than the private sector at lower levels, but what’s interesting is by just how much—the 7th pay panel got IIM Ahmedabad to do a comprehensive mapping of government vs PSU vs private sector salaries across several types of jobs, and across various years of experience, and the results are frightening when you look at the quality of service got for the vastly higher government pay.
A government school teacher, before the pay panel award, with no experience gets paid R52,000 as compared to a mere R19,000 (at the top end) in the private sector—the difference only widens when, after 25 years of service, they get paid, respectively R1,12,000 and R38,500; and the ASER study tells you how government school children are a lot less proficient than private ones. A fresh government nurse gets 3.4 times her private sector counterpart, a driver 1.8-2 times. It pays a lot more to be a doctor in a government hospital if you’re an MBBS but as the skill levels rise—to an MD or an MS—private jobs are far better. Fixing this is not going to be possible since no one is going to take a salary cut, so the only way out is to stop recruitment in certain jobs and hire staffers on fixed contracts, much like in the private sector—various states have been doing this for years for teaching staff, for instance. This will create two categories of government employees—the overpaid and the rightly-paid—but there is no other option.
Finance minister Arun Jaitley was only stating the obvious when he said recently that the Pay Commission-mandated higher pay for government staff and the one-rank-one-pension (OROP) scheme would come at the cost of the Centre’s ambitious social development projects.
It pays to be in the government, literally. Across several job roles, ranging from drivers, gardeners, plumbers and storekeepers to scientists, engineers, doctors and software developers, government/PSU salaries are significantly higher than comparable packages for private-sector employees and more so at the entry and middle levels, according to a recent IIM-A study.
While the myth of government employees being worse off than their handsomely compensated private-sector peers might have already been exploded, the latest study commissioned by the Seventh Central Pay Commission has really turned the tables on the well-heeled government staff.
The last two pay commissions — especially the 6th panel that hiked salaries of government staff by a hefty 40% — and the generous dearness allowances given to government/PSU employees in recent years have led the IIM-A researchers to conclude that in many of the roles, “the government is paying higher salaries compared to the private sector, particularly in initial years for jobs at the lower levels of skill requirement and hierarchy”. And in some cases, the disparity is starker — for instance, an entry-level nurse (with up to five years’ experience) gets Rs 58,000-67,000 a month in the government while the comparable private-sector salary is Rs 13,000-28,000. Even in the case of highly skilled jobs, the government/PSU sector is often better paymaster than private firms — an engineer with the railways, for example, is paid Rs 52,000-61,700 in the initial five years of her career and one with a Maharatna PSU up to Rs 1 lakh, compared with Rs 33,000-52,000 offered to a private-sector engineer.
The last two pay