Commentary/Rajiv Shukla

Most of the Pay Commission's recommendations will be accepted

Today, the political and administrative circles of the capital are abuzz with speculation about the Fifth Pay Commission Report. And a lot of talk is centred around Prime Minister H D Deve Gowda's impending meeting with the chief ministers on this issue.

Principal secretary to the PM, T Satish Chandran, and Cabinet Secretary T S R Subramaniam are working overtime to study the Pay Commission Report and prepare a broad-based brief for Deve Gowda before he meets the various heads of states. Chandran and Subramaniam will, thus, play an important part in determining the government's stand on this matter.

According to sources in the PMO, the United Front government is set to accept most of the recommendations made by the commission. Save a few, like the suggestion of tax-free 67 per cent pension for retired employees. The popular perception in the PMO seems to be that this is impractical as an employee's pension would then exceed his salary. While the government is seriously considering payment of pension amounting to 67 percent of basic salary, it will not be tax-free.

There is some confusion regarding raising of retirement age from 58 to 60 years. While Deve Gowda is said to be keen on this, various chief ministers have made it clear that they are willing to implement this only if the Centre agrees to pick up the tabs for this additional expenditure. Also, young officers are resenting the proposed extension of service.

But there seems to be no dispute over the proposed raising of House Rent Allowance for government employees. With government employees having to depend largely on private accommodation these days, and rents rescalating, it is but logical that the HRA be raised.

The two main problem areas for the finance ministry will be defence and police. Already, voices of dissent over the Pay Commission Report can be heard from these two services. While I am not sure how practical it will be to drastically cut down on the work-force in the defence services, I strongly support the Pay Commission's recommendations to privatise ordinance factories. Today, they are totally non-productive units and the hot-beds of corruption. Hundreds of millions of rupees are wasted on the factories just to keep a few thousand people employed. Once privatised, the ordinance factories will not only produce sophisticated weapons for our forces, but we will also be in a position to market these arms internationally.

Special benefits must be granted to all security personnel posted in Siachen, the North-East, and all sensitive border areas. But the IPS officer's demand for equality with the IAS cannot be supported. While there should not be too much of a difference in their salary structures, it must not be forgotten that these two services are largely different in nature.

While deciding on the Pay Commission's recommendations, the United Front government would do well to pay heed to former finance minister Manmohan Singh's suggestion that the burden of expenditure should not exceed Rs 50 billion. According to present estimates, we are looking at an expenditure figure of around Rs 80 billion. This could be a serious cause for concern to the finance ministry.

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