Administrative focus for next pay panel

Housing minister Ajay Maken wants a new pay commission to compensate nearly 3.2 million central government employees. The case is weak for much of a salary increase, with all components of civil service pay already indexed to inflation. However, if political expedience leads the government to announce a Seventh Pay Commission, it should focus on administrative reform to make the government leaner and more accountable. Savings should be used to give performance-linked incentives to improve service delivery.


The terms of reference of the new commission should be different to avert any fiscal disaster. It should make recommendations on new salaries commensurate with the services rendered. The panel should look at different layers and take into account pay differentials between similar categories of staff in the public and private sectors. Government employees at the lower level are paid much better than their private sector peers. To some extent, this is justified, but why should, say, a driver in government service be paid several times the emoluments of his counterpart in the private sector? So, the commission must review the employment pattern to reduce the size of lower bureaucracy. At senior levels, there could be a case for liberal hikes, especially specialised talent, for example, as appointments to regulatory agencies. Lateral entry should be the norm, not reservation for a service cadre. Fixed tenure and transfers only as per norms should be brought back on the table.

States should raise salaries of their employees according to their ability to pay rather than blindly follow the Centre. Pay awards should start from the date on which the recommendations are accepted to do away with arrears. A separate pay panel for defence forces also makes eminent sense.