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The threat of a pink slip works

The threat of a pink slip works
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First Published: Tue, Mar 25 2008. 01 24 AM IST
Updated: Tue, Mar 25 2008. 01 24 AM IST
The Sixth Pay Commission has asked taxpayers to spend around Rs15,000 crore extra each year on government salaries. What will they get in return?
The amount itself is not back-breaking, even though there will be further charges when states try to match salary levels of Union government employees. The gap between private and public sector wages has widened since 1998. That will at some time hollow out the bureaucracy. Talented youngsters will have few reasons to join it. The best insiders will move out to take jobs in the private sector. So we have no major quarrels with the hike itself.
But citizens have a right to ask whether better-paid bureaucrats will perform better. India is facing a crisis of governance. There has been a lot of talk about the yawning gap between outlays and outcomes, as money spent on social programmes does not have the desired impact on the lives of the poor; even the better off share horror tales of trysts with an inefficient bureaucracy.
This pay commission is unique in that sense. One of its tasks was to suggest ways to make the beast more efficient and citizen-friendly. It has made several sensible proposals. There are incentives linked to performance. There are attempts to cut staff layers to ensure faster decision-making. There are special pay packages for senior bureaucrats and scientists. There is a suggestion to bring in outside professionals on fixed-time contracts.
These are welcome incentives. Incentives work. But so do disincentives. There is little in the report?on how the slackers and the corrupt can be whipped into shape. A government can’t hand out pink slips at will. But even the threat of lost jobs or missed increments will do wonders. It works in the private sector. There is no reason why it won’t work in the public sector.
This fits with the overall goal of cutting the size of the government. Also, India needs expertise in its civil administration. Computers can replace the battalion of overpaid clerks over the years, in a game of attrition.
The Sixth Pay Commission has taken a few important steps towards better governance. What remains to be seen is whether this government has the spine to implement the report in its totality. Or will it merely push through the pay hikes, dump the suggestions on efficiency, and let the next group in power handle the fiscal consequences?
Can the government implement the pay panel report in full? Write to us at views@livemint.com
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First Published: Tue, Mar 25 2008. 01 24 AM IST