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For the central govt, new hiring cuts both ways

In finance ministry, the big increase is in departments of direct taxes and indirect taxes, both of which are projected to double their headcounts this fiscal.Premium
In finance ministry, the big increase is in departments of direct taxes and indirect taxes, both of which are projected to double their headcounts this fiscal.

  • Govt is under pressure to hire more to aid job creation but, on the other hand, it’s trapped for funds and can’t afford to keep adding to its salary bill
  • Of the jobs that the railways is offering, 99,000 are replacements for retiring staff and 131,000 are new posts

In the current narrative of an economy facing a jobs crisis, earlier this month, railways minister Piyush Goyal said the Indian Railways will recruit 230,000 people over the next two years and the new criteria of 10% jobs being reserved for economically weaker sections will apply. Of these, 99,000 jobs are replacements for retiring staff and 131,000 are new posts.

If it goes as planned, the government’s biggest employer will get even bigger. As will the overall government, in all likelihood, reversing its current trend under the BJP-led government of shrinking in size.

The latest year for which actual data (as opposed to estimates) on government staff is available is 2016-17. Between 2004-05 and 2016-17, a 13-year period that covers three governments, the staff strength has moved between 3.2 million and 3.3 million employees.

The staff count rose under UPA-I and fell under UPA-II. Under the current NDA government’s first three years, it fell again. But for this government’s five-year term, the staff count could rise again if its estimates hold true. They usually don’t: the Centre is notorious for not meeting its own estimates. In 2008-09, when the UPA-I finished its term, the gap to estimated number of jobs was 5%. In 2013-14, when the UPA-II finished its term, the gap was 3.5%. And in 2016-17, this gap was 7.7%.

Yet, under this government, more ministries have expanded in size than the previous two governments. Of the total 50-odd ministries, the number of ministries that grew in employee count has increased from 12 in UPA-I to 17 in UPA-II to 21 under this NDA government (see chart 1).

The staff expansion in these 21 ministries is more than counter-balanced by the 34 ministries that shrunk in size between 2013-14 and 2016-17. On a net basis (new hirings minus retirements), this government has seen a decline of 75,231 employees. This drop is in line with the Pay Commission’s recommendations, which said the Union government was overstaffed.

Five ministries saw a cumulative net decline of about 133,000 jobs. These were the ministries of home affairs, communications (which includes India Post), railways, health and family welfare, and labour and employment (see chart 2).

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(Ahmed Raza Khan/Mint)


Hence, at a time when the government is cutting back on hiring, the 230,000 jobs the railways is offering now acquire significance. Just four ministries comprise about 93% of government staff: railways, home affairs (which also includes Delhi Police), communications and finance. Of this, railways has an employee share of 40% and home affairs 34%.

In contrast, the ministries of defence and finance have been net hirers, adding 65,754 new employees in the three-year period ended 2016-17. In finance, the big increase is in departments of direct taxes and indirect taxes, both of which are projected to double their headcounts this fiscal.

For the Centre, it’s a Catch-22 situation. On the one hand, it is strapped for funds and can’t afford to keep adding to its salary bill, which climbed 50% between 2013-14 and 2016-17 following the implementation of the Seventh Pay Commission. On the other hand, it is under pressure to hire to aid job creation. It cuts both ways.

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