Former comptroller and auditor general, Rai is chairman of Banks Board Bureau.

On June 30, headlines across newspapers were on the Union government having approved the Seventh Pay Commission recommendations. The Economic Times headline read, “Central staff hit pay dirt: An early Diwali”. The newspaper said the government had accepted the recommendations doling out ‘hefty’ pay hikes. The salaries were expected to increase in the range of 14 per cent to 23 per cent. The bold fonts also announced that the lowest salary was to increase from Rs 7,000 per month to Rs 18,000. The highest salary, received by the cabinet secretary, was to go up to Rs 2,50,000 from Rs 90,000.

Sounds huge, does it not? But we need to analyse this. What is the bonanza and what are the hefty pay hikes which are speculated to be “fuelling inflationary pressures”?

Actually, the salary of Rs 7,000 and Rs 18,000 are not comparable. The equivalent of the Rs 7,000 basic salary, which was fixed 10 years ago and currently applicable with the dearness allowance added on, is Rs 15,750 (Rs 7,000 basic plus 125 per cent DA). In the salary of Rs 18,000 now announced, the DA is subsumed. Thus, a more accurate comparison would be the present salary of Rs 15,750 and the new salary of Rs 18,000. Similarly, the cabinet secretary at present receives Rs 2,02,500. The newspapers also announced that the total outgo as a consequence of the hike was expected to be Rs 1 lakh crore.

The comments on social media are more expressive! They question whether government employees actually deserve higher salaries: “Being paid more for what?”, “More pay for less and less work”, and “Babus don’t deserve a hike.” In fact, it is speculated that these increases will fuel inflation. Another school of thought believes that it will kickstart spending, thus generate demand and hence increased economic activity.

The Pay Commission is announced once in ten years. Thus any increase in basic salary comes about once in ten years. Even if we were to assume that this Pay Commission has brought about a hike of 20 per cent, it would tantamount to a simple rate of 2 per cent per annum. Which employee in the private sector would be content with a 2 per cent per annum hike? A couple of years ago, I was pleasantly surprised to hear of the bonus received by one of the youngsters in the family. I found that his annual bonus alone was more than the sum of the total salary earned by me over my entire career! He could afford at least two vacations abroad for himself and his kids every year, travelling business class. My wife and I have never been on any vacation as yet. At most, every year we visited our parents using up my earned leave or she would accompany me if I travelled on work. For him the weekend is a total break from work—he gets no official calls over the weekend. Mine was a 24×7 job when I could not refuse anyone who called me. Once when my wife reminded the caller that he had called on a holiday, he had the gumption to remind her that official phones were given to government functionaries so that they could be contacted all the time!

There is then the fear that the pay increase will cause financial difficulties to state governments. True, it will. However, prudent financial management requires constant mobilisation of resources. However, considering the fact that we have just about an election every year, to local bodies or state legislatures or the general election, very few governments can take appropriate measures to increase taxes or tap methods to raise resources. If you cannot take harsh decisions to raise resources, why blame government employees who get a paltry increase of 2 per cent per annum?

I acknowledge that government employees are not the most popular guys. To a large extent, we are to blame for this. This perception needs to be addressed and only we can do that with our own endeavours and actions. However, if the general public still continues to grudge the paltry increase, they must realise that if you pay peanuts you get only ……….!

Source : http://confederationhq.blogspot.in/

The post A miserable 2 per cent – ARTICLE BY SRI. VINODH RAI ON 7TH CPC appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

The article ‘A miserable 2 per cent‘ written by Shri. Vinod Rai, former comptroller and auditor general, and presently the chairman of Banks Board Bureau appeared in The Week magazine (24th July edition).

In the article, Shri. Vinod Rai clears up the myth of the supposedly ‘hefty’ pay hikes that the government ‘babus’ would receive on account of the 7th Pay Commission recommendations.

A miserable 2 per cent

On June 30, headlines across newspapers were on the Union government having approved the Seventh Pay Commission recommendations. The Economic Times headline read, “Central staff hit pay dirt: An early Diwali”. The newspaper said the government had accepted the recommendations doling out ‘hefty’ pay hikes. The salaries were expected to increase in the range of 14 percent to 23 per cent. The bold fonts also announced that the lowest salary was to increase from Rs.7,000 per month to Rs.18,000. The highest salary, received by the cabinet secretary, was to go up to Rs.2,50,000 from Rs.90,000.

Sounds huge, does it not? But we need to analyse this. What is the bonanza and what are the hefty pay hikes which are speculated to be “fuelling inflationary pressures”?

Actually, the salary of Rs.7,000 and Rs.18,000 are not comparable. The equivalent of the Rs.7,000 basic salary. which was fixed 10 years ago and currently applicable with the dearness allowance added on, is Rs.15,750 (Rs.7,000 basic plus 125 per cent DA). In the salary of Rs.18,000 now announced, the DA is subsumed. Thus, a more accurate comparison would be the present salary of Rs.15,750 and the new salary of Rs.18,000. Similarly, the cabinet secretary at present receives Rs. 2,02,500. The newspapers also announced that the total outgo as a consequence of the hike was expected to be Rs.1 lakh crore.

The comments on social media are more expressive! They question whether government employees actually deserve higher salaries: “Being paid more for what?”, “More pay for less and less work”, and “Babus don’t deserve a hike.” In fact, it is speculated that these increases will fuel inflation. Another school of thought believes that it will kickstart spending, thus generate demand and hence increased economic activity.

The Pay Commission is announced once in ten years. Thus any increase in basic salary comes about once in ten years. Even if we were to assume that this Pay Commission has brought about a hike of 20 percent, it would tantamount to a simple rate of2 per cent per annum. Which employee in the private sector would be content with a 2 per cent per annum hike? A couple of years ago, I was pleasantly surprised to hear of the bonus received by one of the youngsters in the family. I found that his annual bonus alone was more than the sum of the total salary earned by me over my entire career! He could afford at least two vacations abroad for himself and his kids every year, travelling business class. My wife and I have never been on any vacation as yet. At most, every year we visited our parents using up my earned leave or she would accompany me if I travelled on work. For him the weekend is a total break from work—he gets no official calls over the weekend. Mine was a 24×7 job when I could not refuse anyone who called me. Once when my wife reminded the caller that he had called on a holiday, he had the gumption to remind her that official phones were given to government functionaries so that they could be contacted all the time!

There is then the fear that the pay increase will cause financial difficulties to state governments. True, it will. However, prudent financial management requires constant mobilisation of resources. However, considering the fact that we have just about an election every year, to local bodies or state legislatures or the general election, very few governments can take appropriate measures to increase taxes or tap methods to raise resources. If you cannot take harsh decisions to raise resources, why blame government employees who get a paltry increase of2 per cent per annum? I acknowledge that government employees are not the most popular guys. To a large extent, we are to blame for this. This perception needs to be addressed and only we can do that with our own endeavours and actions. However, if the general public still continues to grudge the paltry increase, they must realise that if you pay peanuts you get only…. !

Former comptroller and auditor general, Rai is chairman of Banks Board Bureau.

The post A miserable 2 per cent – An enlightening article by Vinod Rai on the 7th Pay Commission appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Govt may withhold cash, jewellery details of babus: Times of India

NEW DELHI: In what could bring relief to nearly five million Central government employees, the Narendra Modi government has decided to amend the Lokpal and the Lokayukta Act to give itself a statutory power to withhold certain information from the public.

All Central staff, as per the latest order of the Department of Personnel and Training (DoPT), have to declare their assets and liabilities, both movable and immovable, as well as those of their spouses and dependents latest by September 15. All these information would then be put up by the respective ministries on their website accessible to everyone.

A number of representations received by the government from officials expressed fear that putting details of movable assets such as jewellery and cash in hand and bank would pose a security threat to them and their dependents, leave their children vulnerable to kidnapping and ransom demands. For instance, an official said he has put all savings in general provident fund which has accumulated to Rs 75 lakhs over a period of time. Putting this information in the public domain would leave him and his family members vulnerable.

Sources said the amendments proposed only gives the government the statutory power to withhold information related to officials’ movable assets only, such as his cash in hand or bank and jewellery owned by him or his family members. The government will not be empowered to hold back information on immovable assets: house or land owned by him.

The amendment also makes it clear that it will have no impact on the current asset declaration guidelines. The officials will have to continue declaring all their assets – movable and immovable as per the previous directive. Only difference the proposed amendment will make is to ensure certain information is not made public.

The DoPT is working on the proposed amendment and has already taken a view from the law ministry to bring in the required changes. Any fresh amendment will not impact the current declaration deadline of September 15 which is applicable for all employees.

Once these declarations are received by the government, it is for the respective ministries to put them up on its website accessible to all, except those related to the movable assets for which an amendment is required to implement it.

Source: Times of India

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