The Seventh Pay Commission has recommended a hefty 32% increase in pay and allowances of central government employees and a 24% increase in pensions that will effectively grant one rank, one pension to all employees, civilian and defence. Decent work deserves decent pay. However, on structural reform of the civil service to ensure decently paid babus deliver decent work, there has been dissension within the commission, which has passed the buck to another body on civil service or administra tive reform. Indeed, the government should set up such a body. As the country integrates into the global economy and governance becomes ever more complex, the competence and work required of civil servants mount. Doling out money will not suffice to get the right man for the right job.
Senior job vacancies must be filled from a common pool of talent that cuts across different services and cadres and includes potential lateral entrants as well. Pay and perks must not be linked to a service or a cadre, but to specific jobs. Replicating the armed forces, where a person who is overlooked for promotion retires prematurely, makes eminent sense for the civil service. This will create a positive incentive to perform, absent in the current structure of assured promotions, particularly for the IAS. The commission's recommendation to improve the functioning of the National Pension System (NPS) makes eminent sense. The armed forces, too, must come under the NPS. The Fifth Pay Commission's recommendation to ensure that civil servants have assured tenure in a particular post and that transfer outside defined norms would take place only on the recommendation of a high-powered body for reasons that are recorded remains valid.
Will the additional outlay of an estimated 0.65% of GDP on higher pay, perks and pensions derail India's fiscal numbers? Taking the impact on the states as well, the effect would be larger. But this is bearable. The solution is to improve tax collections, a measly 16% of GDP for the Centre and the states combined. It's time we got serious on the goods and services tax.