The Hindu Business Line : Do the Mandarins deserve a new deal?

The Prime Minister, Dr Manmohan Singh's pronouncement for the setting up of the Sixth Pay Commission came as a big surprise. To oppose most of the far-reaching reforms has verily been the DNA of comrades. The constraints imposed by the UPA's Common Minimum Programme are constantly exacerbated by populism. The Fifth Pay Commission's (FPC) impact on the economy has been disastrous. Besides the debilitating effect on the central fiscal health, as many as nine States have been seriously reeling under the burden of FPC salary scales.

Expenditure on salaries in the North-East is four times the total revenue of the States. A World Bank study underlines a key issue in Indian civil service reform — that of the growing salary burden facing governments, crowding out non-salary spending. In the health sector, for example, salary spending ranges from 60 per cent in some States to over 90 per cent in others.

Need to implement FPC proposals

In the case of a new trade round under the World Trade Organisation, India emphasised that there must first be full compliance of the Uruguay Round decisions.

Likewise, before contemplating any new round of civil service emoluments, Government must first implement all FPC recommendations in letter and spirit, for instance, a 30 per cent reduction in government jobs over 10 years; making the structure horizontal, pruning the current five-six layers to no more than two; not having posts lower than those of the desk officer, all posts below this level being subsumed under one post — that of the executive assistant; increasing productivity in government offices by curtailing holidays, reducing the number of secretary level posts from 90 to 30, and so on.

According to a World Bank survey, the average salary of a government employee in the UK during 1995-2000 was £19,000 per annum , 1.4 times the average British citizen income of £13,500. This ratio in Indonesia was 1.0, China 1.2, the US 1.4, South Korea 1.5, Argentina 1.9, Singapore 2.9, and Malaysia 2.9.

The average annual income of the government employees in India was Rs75,000, as much as 4.8 times the average income of Rs 15,600 of the Indian citizen.

When the leaders talk of aam aadmi and of human face, who do they mean? The toiling peasant, the stonebreaker, the daily wage earner whose tomorrow is uncertain? Or the tribal, rural landless, the urban slum dweller, the real destitute, struggling to eke out sustenance, able just about to keep body and soul together?Or those among the high decibel?

It is not only that FPC recommendations in regard to efficiency and productivity enhancement were consigned to cold storage, there has been no attempt made to shed the flab in government machinery. Numerous committees and commissions have exhorted that the administrative structure be streamlined and reorganised. Government imposed a 10 per cent cut across the board in the number of sanctioned posts as on 1 January 1, 1992. Instructions were also issued in January 2000, directing a 10 per cent reduction in the number of posts created during the period January 1992-December 1999.

The Expenditure Reforms Commission covered 36 ministries and departments and submitted ten reports. It recommended a further 10 per cent cut in the sanctioned strength of staff as on January 1, 2000 to be carried out for each ministry/department by 2004-05. The Commission recommended a total ban on creation of new posts for two years. The staff rendered surplus were required to be kept in a pool, to be redeployed in arising vacancies. Nothing of this has happened.

The number of State sector employees rose from 15.484 million in 1981 to 19.138 million in 2001. Ministries, departments and services have mushroomed. Many of these services today have no economic relevance.

Employment creation?

Instead of the State creating employment opportunities, it becomes a provider of employment. As manyas 95 per cent of its employees are categories `C' and `D', a preponderance of clerks and assistants, peons and khalasis. Government today needs more specialists and fewer generalists. A steady inter-service competition has brought about a windfall by way of numerous positions even at the highest levels, which have clearly stymied the very structure, increased the number of layers, blurring responsibility and eroding accountability.

A grossly overstaffed government signifies not just a drain of taxpayers' money and a burden on the poor; it also allows disguised employment.

The bloated bureaucracy is not merely a question of high costs; such large numbers clog the channels of communication; lead to delays, and diffusion of responsibility. Everyone begins making a contribution and slowing down the process, often generating unnecessary, unproductive work.

Too many layers

Too many rules have created too many layers of supervisors and controllers who, however well intentioned, "wind up managing simple tasks into complex processes". Fewer managers means fewer rules: Fewer rules more time: more time allows officers to listen to citizens and respond to the needs of governance.

The diverse interests pulled the FPC report in diverse directions. A genuine doubt arises: Should a pay commission be only an agency for upward refixing the pay and allowances of the government apparatus on a 10-yearly cycle. Shouldn't higher salaries go with a much leaner government; shouldn't all redundant tasks be forsaken and the mandarins unburdened with security of tenure?

Need for stringent norms

The FPC had clearly suggested that stringent norms be laid down to measure productivity of each category of employees in order that the laggards are sent packing. It is an absurdity that employees demand security of a government job in addition to perks of a private job.

The leaders ignore even good examples followed in close neighbourhood.Premier Zhu Rongji axed as many as two million government jobs as a measure of administrative reforms in China.

There is a constant chatter that flabby bureaucracy needs trimming, The ever proliferating number of ministries and department cry out for the pruning secateurs. Proposals to start the pruning process from the vast base of the pyramid immediately get scuttled by politicians and unions who see their empires threatened.

If the start is made with, say, 10 per cent flab-shedding at the level of joint secretaries and above all the way through ministers, one can offer some hope of success to shave 30 per cent of the workforce at the bottom of the pyramid.

(The author is a former Chairman And Managing Director of Concor.)

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