Why implementing the Seventh Pay Commission recommendation is a herculean challenge

By Shantanu Nandan Sharma, ET Bureau | 20 Dec, 2015, 07.00AM IST

Justice Ashok Kumar Mathur, a former Supreme Court judge and chairman of the Seventh Central Pay Commission (CPC), has returned to his home town Jodhpur in Rajasthan after spending two years in Delhi and submitting a 900-page humongous report recommending a hike in pay, allowances and pension for 47 lakh government employees and 52 lakh pensioners.

Even as the government kickstarts the process of implementing the report, something that will cost the exchequer over Rs 1 lakh crore, Mathur nowa-days hears only the disgruntled voices.

He continues to read complaints in newspapers and hears deep anxiety among civil servants over phone calls. 

The Confederation of Civil Service Associations (COSCA), comprising 20 different class-I services such as Indian Police Service, Indian Revenue Service and Indian Information Service, amongst others, met finance minister Arun Jaitley early this month. The purpose of that meeting was to press their demand that the empowered panel of secretaries, which will examine the report before the Cabinet takes the final call, must not be dominated by one service, read IAS. 

What they want is the removal of the edge that the IAS enjoys so far, something that was fiercely opposed by one member in the CPC, thereby making it difficult for the government to draw a conclusion. Then, the Central Secretariat Service which is considered the backbone of the Central government ministries and the one that comprises over 12,000 employees, is planning a massive agitation in the coming week near North Block. They will protest against what they call an unfair treatment meted out by the CPC because "some officers with vested interests" misled the Commission.
Meanwhile, the armed forces personnel, the officers in particular, have made their unhappiness public. Though the CPC increased their pay substantially — packages are about 30 per cent higher than their civilian counterparts — the withdrawal of free ration in peace areas for officers by the Commission seems to have hurt them the most.
Not a Cakewalk.

"It's Dil Maange More for everyone in the government. I wish I could make everyone happy... I feel very sad to hear that many in the armed forces are still not satisfied," Justice Mathur told ET Magazine over phone from Jodhpur, adding that he travelled across the country including Siachen to get a pulse of the conditions the forces serve in before making his recommendations. 

For the government, the challenge begins only now. Implementing a pay commission report is not a cakewalk particularly when the chairman and two of its members are not on the same page on a number of issues — including the contentious one of whether IAS officers should be allowed to continue with the edge that they have enjoyed so far over other civil servants. 

In 2008, the then United Progressive Alliance (UPA) government took about five and a half months to implement the Sixth Central Pay Commission, and in the backdrop of disparate voices and continuous lobbying by various services even after the submission of the Seventh CPC report, the present government's job could turn out to be much more challenging.

"The government can't make the pill more bitter than it is. We expect the government instead to sweeten the Commission's recommendations further," says IRS officer Jayant Misra, who is also the convenor of COSCA. "We have also appealed to the finance minister and cabinet secretary that the empowered committee of secretaries must not have more than 25 per cent members from one particular service so that the report can be examined objectively and impartially." 

The government has set up an implementation cell for the Seventh CPC, to be headed by a joint secretary-ranked IAS officer, RK Chaturvedi. This cell, which comes under the department of expenditure, will give all the inputs to a committee of secretaries (CoS) to be formed under the cabinet secretary for examining the report. The expenditure secretary will then compile the decisions of the CoS and prepare the Cabinet note. And the Union Cabinet will take the final decision on which of the recommendations could be accepted, and which discarded. 

This process may take six months or more. But as it involves Rs 1,02,100 crore, with the new pay scale likely to be effective from January 1, 2016, the government has to make a provision for the last quarter of the current fiscal year, apart from earmarking a sizeable expenditure in the coming Budget to be presented in February. The Railways, which have to bear Rs 32,000 crore of the burden, also has its task cut out. "The Seventh Pay Commission is a big challenge for the Railways. We have to talk to the finance ministryand collectively find a way out," says railway minister Suresh Prabhu, who has his hands full in his attempt to restore the financial health of the organisation. With a workforce of about 1.4 million, the highest in any government department, the Indian Railways will face the brunt of the Seventh CPC load. 

The Balancing Act 

Overall, the government will take a hit of Rs 39,100 crore on account of salary hikes and another Rs 29,300 crore from allowances, if the government decides to accept the CPC recommendation as it is. Of the allowances, a whopping Rs 17,200 crore will be on account of only one allowance — house rent. 

It is on the allowances front that the government can save some money if it delays implementing the report. While the pay hike per se will be retrospective, with government servants getting arrears with effect from January 1, 2016 if the Centre accepts it as the effective date, the payment on account of allowances is prospective in nature. 

Money is, however, not the only challenge that the government has to cope with at this juncture. The bigger challenge is how to arrest the growing discontent among various layers of civil servants who are at loggerheads with each other. Whereas IPS, IRS, IIS among others want parity with IAS in terms of rank and pay, the next layer, the Central Secretariat Service, has its angst against their immediate superiors in the civil services hierarchy. "We are not in a tussle with the IAS. But many Group "A" services officers don't want us to move up the ladder. We have taken the agitation path, as the Pay Commission did not even hear us out because of some officials with vested interests," says Rakesh Kumar, general secretary of the Central Secretariat Service Forum.
Back in Jodhpur, Justice Mathur may be wishing he could have pleased all government officers, but as he himself realises the only way to achieve that would be to drive the government bankrupt.