The Hindu Business Line : Not-so-caring

Even as the government is to be applauded for its social legislation “The Maintenance of and Welfare of Senior Citizens Act”, ironically, it is necessary to caution that it should not go retrograde on the so-called ‘unbearable burden’ of pension payments to government pensioners who too are senior citizens. Comparing the wage bill of the current personnel with pension payments, to say that the latter has exceeded the former is invidious at its wors t and patronising at its best. The two figures are simply not comparable, at least in the Indian context.

The government attracted candidates in the wake of Independence, not only because of the nest egg provided by its defined pension schemes, but to give the idealistic youth an opportunity to take part in building a new nation by joining the government. However, taking advantage of such attractive features in a relatively non-competitive but stagnant labour market, the government kept the wages depressed, particularly of the executives, ever since 1947, and even through its Pay Commissions. This will be evident to those who can recall pre-Independence salaries. An instance of glaring inequity of such blatant deprivation was in the 1970s, when the then Prime Minister, Charan Singh, capped all salaries at Rs 2,400.

Fair compensation

To some extent, only in 1996, the Fifth Pay Commission realised that the executive-level officers should not be driven to despair and extra mural ways of making good deficits. It remains to be seen, for all the assurances of the minister in charge of department of personnel about attracting talent and retaining it, how far is the government willing to go with the Sixth Pay Commission in paying fair executive compensation.

However, to make matters difficult, between 1996 and now, the salaries of the private sector seem to have gone though the roof. In any case, even if pension payments are linked, as they are now, to the current levels of pay packets of serving personnel, it should be reiterated that they remain yet a part of a debt to be recompensed.

Retirement age

A related aspect of government service is the retirement age. It was raised from 58 to 60 in 1998. A proposal to raise it to 62 appears to have been referred to the Sixth Pay Commission. No doubt, longevity has increased and people are capable of working full-time and, as a consequence, longer.

However, India fortunately has a favourable youthful demographic profile unlike countries of the West where retirement ages, if mandatory, range from 62 to 65. Over there, the discussion centres round the emerging phenomenon of fewer people working to support a larger population of elders as there are comprehensive regulations covering the entire organised workforce and not just the government servants.

India, a country of youth, has to catch them younger to man their civil services rather than provide berths for a few more years for the people in their twilight zone. To sanction themselves two more years of cocoon will be too tempting to resist for those in service now. But it will be myopic for the political leadership if they succumb by factoring in the financial aspects alone.

(The author is former Member, Ordnance Board.)

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