Representational image of the nationwide lockdown due to Covid-19 | Photo: PTI
Representational image of an empty road in Mumbai during the nationwide lockdown due to Covid-19 | PTI
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Among the first things that the government did after announcing the complete lockdown a month ago was to ask employers (however badly their operations may have been affected) to make sure their employees were paid in full. Since then, the steady drip of news on salary payments has made for unexpected reading. Half a dozen state governments have announced cuts in employee salaries or deferments in payment. Even Communist-ruled Kerala, having earned universal kudos for its fight to control Covid-19, has announced what amounts to a 20 per cent pay cut for the next five months.

The Centre on its part announced, when Parliament was in recess, a 30 per cent pay cut for members of both Houses (and, more significant financially, a suspension of local area development schemes that MPs decide on). Now it has announced a freeze on dearness allowance increases for its staff, even as employees have made non-voluntary contributions to the PM-CARES fund. The situation in public-sector companies is no different. Air India, for instance, has cut allowances and is reported to be considering a pay cut as well. Ironically, IndiGo has rolled back a pay cut in accordance with “government wishes”.


Also read:What’s common to the lockdown and demonetisation? Modi govt’s lack of planning


Time was when such pay cuts were a complete no-no in Socialist India. Trade unions would not hear of them, even if employer-companies were going bust (and many did, like the textile mills of Mumbai and engineering units in West Bengal). Undeterred, government-appointed wage boards would mandate outsize wage hikes in traditional industries. Labour courts did not allow the economics of an enterprise to enter their frame of reference, though a parliamentary committee has just done that and recommended non-payment of salaries during “natural calamities”, as provided for in a new labour code that no one may have read carefully. Still, government and public-sector jobs were considered safe; both pay and pensions were assured. Not any longer, it seems.

This protected world of assured jobs, wages, and pensions (spelling a modest if secure existence) related to just a sixth of the workforce. The rest were in the informal sector, where it was a free-for-all and you were lucky to even get a proper letter of employment. While the term “labour aristocracy” overstates the case, there were signs that the dichotomy was becoming intolerable; Covid-19 has simply hastened the denouement. To add to the irrationality, the “A” category officers who carry the load of government decision-making are paid less than market, while the proles who are the “C” category workers are paid twice or three times what they would get in the labour market. Loaders in the Food Corporation have got paid more than its chairman and managing director. It couldn’t last and there came a time when employees in the two government-owned telecom companies weren’t paid for months. Now an astonishing 75 per cent of them have decided it is wiser to opt for a voluntary retirement scheme. So much for a secure future in the public sector.

Meanwhile, pension liabilities grew rapidly because of greater longevity, inflation-adjustment, and generous Pay Commission hand-outs, not to mention the one-rank-one-pension decision by the Narendra Modi government in its early days, fulfilling an election promise and sending defence pensions soaring. For the army, as a result, the pension bill has overtaken the pay bill. For the railways, the bill for pay and pensions (including productivity-linked bonuses for an organisation with static revenue) has risen to two-thirds of all costs. For the defence forces, it has climbed to nearly 60 per cent, even as the government is forced to freeze weapon purchases for lack of money.

Such irrationality has to unravel when confronted by the reality of an economy in turmoil. But the smaller shoe that we now have to wear will pinch in different ways. State governments that can’t pay salaries may soon be asked to pay in advance for the electricity they want to buy (unpaid bills have been killing the sector). Delhi’s municipal corporations are months behind on paying salaries, but have not even adjusted property taxes against inflation for 15 years. If Covid-19 helps restore some rationality in these and other areas, its legacy may not be entirely destructive.


Also read: 3 critical steps Modi govt must take to protect people and economy during Covid-19 lockdown


 

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35 Comments Share Your Views

35 COMMENTS

  1. Many workers decided to flee after lockdown announcement. Public transport systems were stopped, leaving people with no choice but to walk. No food no water no medical. Businesses have closed, unemployment has risen and productivity has fallen. Unemployment is at a 50 years high. Almost all businesses in the country will be affected. A large number of farmers and Foreign workers returning home from other nations are facing uncertainty. Various businesses such as hotels and airlines are either shutdown or are cutting salaries.
    Private sectors are prone to layoffs and tremendous amount of employees loses their jobs.
    On the other hand, situation of the govt employees is still much much better then others. They already have excellent pay structure, Working hours, Benefits & Perks, Retirement benefits, Less Work stress, Inevitable salary increment, more holidays.
    and I don’t think that Government employees should have anything to complain about here!!
    atleast they have a very good and stable job.
    What about the other 50 million jobless people of India? they never ask for all those benefits enjoyed by a govt employee.
    It’s not the time to fulfill all the demands of its overly demanding employees.
    Government should strictly and immediately consider for privatisation of most of its areas and sectors so that there would be less inequality among its citizens. and the progress of our country will be highly driven by knowledge, skills and hardwork. This way govt can save its more money and improve its efficiency by manifold.

  2. Idiotic arguments at a time when all we see, all around us, are government employees risking their life for this country and fellows like the author of this article. Reacting to the piece is a wastage of human emotions, let alone intelligence. An unfortunate, ill-informed and malicious piece. How could you, The Print ? Thumbs down

  3. The principle of pension seems to be misunderstood. Pension is a gratitude to the employee for serving the government utilising his knowledge for long years without switching the job for green pasture every 2 or 3 years for better salary. As the cost of living goes higher and higher, a provision was made to compensate the rise in cost of living. That is called DA. How it is given? Based on a reference date and cost of price index the change in cost of living is calculated for a 6 month’s period. The change in DA is announced after another 2 months and implemented after another 1 month. So, govt. employee living in higher cost of living for 9 months which he has already spent is getting now. This goes on twice every year. It is only a calculation and only a portion of the price rise is compensated. After a few years when the DA appears to be more as an allowance pay commission merges the DA into the basic salary, creates their own formula and implements a new pay scale system.
    If cost of living is controlled by government then no need of ( incremental) DA and pay commission. Say about 30 years back when a qualified engineer gets about Rs.3000/- a month in government, for the same job private sector was paying 10000/- a month. Only satisfaction was there is a job security. People who serve the government especially technical and scientific side for long years have to be paid well. For example having served government for 20 years I was getting Rs 3600 in government including allowances. I came out joined private sector and for my experience I got 4 times the salary. Pension in goverment sector is a payment for the loyalty of long service. Do not comppare it with private sector. Do not say government sector employees are paid more. Their perks are negligible compared with the salary and perks of lawmakers who get it without any accountability. Only when one works in government knows under what pressure the government servants discharge their duties. Political, higher ups, socaial stigma, caste and religious bias and bound by a lot of service rules- went work under such pressures only a man knows the problem of government servants..

    • Government are definitely paid more after the pay commission and there is hire and fire rule here private sector pays less money to it employees compared to govertment employees at the same level which are at the lower level it is only less then 1 of the private employess who get more then the government employees for eg Chairman and ceos of companies.

  4. The principle of pension seems to be misunderstood. Pension is a gratitude to the employee for serving the government utilising his knowledge for long years without switching the job for green pasture every 2 or 3 years for better salary. As the cost of living goes higher and higher, a provision was made to compensate the rise in cost of living. That is called DA. How it is given? Based on a reference date and cost of price index the change in cost of living is calculated for a 6 month’s period. The change in DA is announced after another 2 months and implemented after another 1 month. So, govt. employee living in higher cost of living for 9 months which he has already spent is getting now. This goes on twice every year. It is only a calculation and only a portion of the price rise is compensated. After a few years when the DA appears to be more as an allowance pay commission merges the DA into the basic salary, creates their own formula and implements a new pay scale system.
    If cost of living is controlled by government then no need of ( incremental) DA and pay commission. Say about 30 years back when a qualified engineer gets about Rs.3000/- a month in government, for the same job private sector was paying 10000/- a month. Only satisfaction was there is a job security. People who serve the government especially technical and scientific side for long years have to be paid well. For example having served government for 20 years I was getting Rs 3600 in government including allowances. I came out joined private sector and for my experience I got 4 times the salary. Pension in goverment sector is a payment for the loyalty of long service. Do not comppare it with private sector. Do not say government sector employees are paid more. Their perks are negligible compared with the salary and perks of lawmakers who get it without any accountability. Only when one works in government knows under what pressure the government servants discharge their duties. Political, higher ups, socaial stigma, caste and religious bias and bound by a lot of service rules- went work under such pressures only a man knows the problem of government servants..

  5. Just think if govt employees leave their work and stay at home ,imagine the consiquences.
    There is not a true fact in ur article .
    Ye to wahi mansikta hui ki apni dulh se dukhi nhi dusre k sukh se hain jisne saari lofe ek hi department m ek hi organization ko di h.

  6. Well argued Ninan. Most govt employees are paid way too much compared to the private sector. If you calculate all the freebies they get, including free housing and medical cover , they are paid just too much with ZERO accountability.

    Time to do a reality check and make permanent the deductions due to the pandemic.

  7. 7th cpc ka increment 2016 se leke abtak ka arrears kab milega for retired Cr railway employee mumbai.
    April ka salary / pension pe milega karke bol rahe te. Koi information kab milega karke?
    And from when I get my revised pension in my bank account

  8. 1. The article is flawed and prejudiced. It is undermining the services rendered to an organisation by an employee for 20-30 donkey years. Every employee of a private firm or MNC switch their profession for better pay and perks. But there is no such thing in Govt Services. Pay Commission which is expected after every 10-15 years are there to obviate the hardship caused by inflation. It’s not based on anything related to luxurious rise in the living condition.

    2. Cutting pay and allowance of employees and feeding Corporate Giants in terms of soft loans and tax rebates is not justified when most of them are enjoying over tax payers money. Then they declare themselves insolvent and syphon off thousands of crores.

    3. Please check the rate of inflation and rate of DA allocated in last few years. Government is incapable to stop tax frauds. Agriculture sector owned by giants, doctors, politicians, are paying no tax or negligible tax. For Central Government Officials, tax is deducted at source. Have a heart. Most of the employees post 2000 is getting only contributory pension.

    5. Don’t even dare to touch Armed Forces. You are not qualified to even discuss that as I don’t want to cribb hardship faced by them. Please do not spread hatred and anger in this trying time to earn TRP

  9. Overall a shallow argument. At times its factually incorrect also. Now a days FVI leaders don’t earn more than its CMD. That situation was way back till 2015-16, After Mumbai High Court, Nagpur the situation changed completely and thereafter never loaders’ total emoluments exceeded to the level top management.

  10. Bring back 7000000(seventy lac crore) from Swiss bank then no need of cutting anyones salary be it public servant or private servant

  11. The requirement to pay higher wages/ pension to government employees also has a negative impact on the employees themselves. Becuase of the higher salary/ pension burden many govt. / Govt run/ autonomous institutions always keep employees on contract basis. They have no job security.

  12. There is a complete lack of planning, if one were to accept that the loot of the Exchequer since the independence was a planned one. The disproportionate rise in wages and allowances was also part of that planned loot, are formal bribes thrown down the road so the bigger loot is kept under wraps.
    Regardless of what we loose and how much we suffer in the covid-19 if this can give us an opportunity to clean up the system, we will have made a big gain.

  13. Some people think that in view of Covid19 you can do away with Defense spending. This is a dangerous and stupid thought. The war on terror is still on if it is not being covered in the mainstream media does not mean it is not happening.
    The standoff between Iran and USA is for all to see and India India won’t remain untouched. The way China is being condemned and if the measures talked about is actually implemented don’t expect China to take it lying down and can lead to extreme actions. Go back in history seemingly inconsequential actions led to World WarI . It will be foolhardy to stop the modernization of the Defense Forces. Stop Defense expenditure stop modernization do it at your own peril

  14. Over the years pay and pension distortions have become so wide that these are shocking and are patently look irrational. A worker or machine man who toils for 10-12 hours a day hardly gets Rs. 10000 -12000 only, while even a retired peon get cool pension of Rs 2oooo/ plus free medical facilities life long and after his death his/her spouse come on the throne of retiree . Is it justified ? Over the years the Government machinery has been self-serving and is cornering a major chunk of finances for themselves . When it is clearly visible on horizon that next wave of industrial revolution will eliminate maximum numbers of jobs in private sector due to use of , automation, robots, AI , internet of things ets. It is high time to devise a system that provides for decent living for all citizens where ever employed. The system of Universal Basic Income will have to be implemented for all. We have pay commission for Government Employee every now and then. It is high time have NATIONAL PAY and COMPENSATION COMMISSION , with mandate to devise a nationally acceptable pay package to ensure equity an equality for all. Next decades are going to be very different from the decades gone by. Be prepared. Be ready.

  15. Why the loaders should not get more salary than CEOs/MDs ? You have the sick mentality of divide and rule and hierarchy but no respect for the sweat he flowed day and night in summer, cold and rain he does more labour than a MD so his payment is justified. Why are your private hospitals shut down their gates for covid patients of fear and here govt employees have to attend without protective gears, police is working round the clock while you sit in an AC room and write whatever you want.

    • Shit , the govt servants should suffer , why shouldnt the CEO be paid more , mr Ambani reads till night 2 pm , created 10 lakh crore company , and gave lakhs of jobs to Naukars , tirelessely working for 40+ years , even amidst media pressure and critisism for rich . INDIA. Needs Malik , not Naukars .

  16. The writer is good in English but shallow in knowledge, article appears to be written in haste. First thing to be reformed should be Indian education system so that we can have better, more informed and more ethical beings in every sector.

  17. This article has no spectacular insights and states most obvious things. But one would like to point out , class A jobs despite being paid less than market , there has been no lack of demand ,with top iit engineers competing for the civil services. And despite extravagant pensions in the army , there is always a shortage of officers , with zero applications from the IIT s. The crux of the matter , I believe is , India was and is a deeply unequal society with almost everything priced not by ‘market’ but by ‘feudal’ tendencies.

  18. FINALLY this issue is getting media attention. Modi’s government has been breaking backbone of middle class small and medium businessmen with huge taxes while raising salaries of government employees to astronomical levels. Getting a government job is now seen akin to winning a lottery while medium and small businessmen are in shambles along with rest of economy.
    Our neighbors who are retired government employees get so much pension that they tell us they don’t know what to do with so much money while others who are businessmen and non-government salaried employees are finding it tough to get by. To purchase a car one has to pay almost 40% taxes (GST etc) on the price of the car. I and many like me would never be able to purchase a new car in India. No wonder auto sector is in recession.
    Only reason everyone still votes for BJP is due to complete lack of a nationalist party – as pointed out by Shekhar Gupta we middle class Hindus are just Modi’s Muslims. This is also a lesson for pseudo-secular parties like Congress who have completely destroyed any faith Hindus had in them by becoming Islamists and having leaders like Digvijay Singh.
    This will not end well and at some point middle class will be fed up with financial hardships and will start voting for non-BJP alternatives even if they are completely anti-national and corrupt.
    Covid should be used as an opportunity by government to correct its mistakes – roll back excessive salaries of government employees and provide tax relief to middle class.

  19. well reat economist PM of India had gifted two pay commission to central govt employees in 10 years.There was no justification for seventh pay commission.But we never found any criticizm of it in media.A most incompetent,corrupt bureaucracy was being over fed by govt and nobody proteted.Now suddenly this feloow realized that they are over paid.

  20. The article by T.N.Ninan,has welcomed the salary and DA &DR cut of central govt. employees and pensioners without having any in depth analysis
    He justified the pay cut on the following grounds. a] they are overpaid. b] the decision making A Category Officers who are in decision making position
    are getting 3 times less than the market driven salary than the C grade employees who are getting 3 times more than the labour market.c] the pension
    to employees to high and hence reduction is justified. d] The BSNL/MTNL employees have opted for VRS for fear of salary not being paid for months and thus become wiser.Apart from this, He has stated that the FCI Loaders are getting paid more than the CMD and irrationality that has crept into the system will go thanks to COVID-19. As a retired govt. employee, a group c employee may get Rs.50000/- per month as average at the fag end of 35 years of service.which is not a very high amount considering the present day living. In my own experiance. except the some IAS/IPS Officers.most of them
    are not taking any major policy decisions. rather implementing the decisions already taken and codified in GFRs,and other rule books with the help of
    their junior level officials. Someof them even may not get a much junior level positions in other sectors post retirement, This is the factual position.
    As a pensioner, I tell you that I am getting a pension of Rs.20656/- [March 2020] after putting in 37 years of service as a group c employ. This is the bearest minimum to live in a city like Chennai. In lieu of CPF we are getting pension without contribution. which has also been dispensed with
    w.e.f 01.04.2004. There is marked bias in your article towards govt. employees.In pvt. sectors, how much money being paid as salary to non excutive directors apart from other perks even if the company running at a loss. There should be a minimum salary of Rs.30000/ required for running a family of 4 how many corporates are giving that. It is shameful that many multinational companies are giving Rs.10000 to 15000/- in and around Sriperumputhur, which is a manufacturing hub of AUTO industry. The low salary paid by these corporate sector should raise the bar which is rational not the other way around. Do you know the salary of a sales person and delivery boy is just 10000/- with 12 hours of work without any social security.
    Please be fair and honest towards any class of employees;expecting such a thing from a person of your stature is too much!

  21. Is this writer is an idiot?…tell him just read 7th pay commission report. government servant is getting ..only pay required to sustain their basic need. Employee in pay band 1 is paid 18000 of basic pay can this idiot think that this amount is too high…

    • What about allowances on this basic salary? Slowly they’ll add up to a large sum. What Ninan is saying is that the salaries at the lower level in the government are comparatively higher than those of similarly placed employees in the productive sector, their output is lower to the benefits (my point) received, and there’s job security which others do not have. Government must set out the roles clearly and devise mechanisms to evaluate the outcomes.
      There was a situation at a government-supported institution, a premier one at that, where staff would be evaluated at the end of every five years, and everyone who has not taken excess leave would get 60-70% marks, leaving only 30-40% for other parameters of performance. No doubt everyone fulfilled all the criteria, got promotion to the next grade, and in no time all were in the same scale as those of their immediate supervisors or superintendents, and were unwilling to take instructions from their seniors claiming that they were also in the same grade and why should they listen to them. The morale suffered so much that it became difficult to extract any work from anyone. They would spent any amount of drinking endless cups of tea/coffee chatting for hours on end, with no one to control them. The institution later probably realised the mistake, stopped all future recruitment, went in for temp. workers, which situation continues to date. Retirees are begged to continue, and none is interested as they cannot extract any work from anyone except the temp. clerks. Of course, this is an aberration. Government employees also include soldiers, doctors, scientists, technicians, and many are hard working, day and night too. There must be a mechanism for accountability in government systems.

      • Man just reasearch before spreading bullshit.
        Just reasearch promotion situation and allowance don,t just say things that do not make sense.

  22. If you really want market forces to be prominent, why’s the govt saving Yes Bank and their ilk. Let them collapse. maybe better business models will survive and our economy will grow.
    As far as govt employees pay is considered, they are revised by an open Pay Commission, stuffed by govt nominees. They want to accept those recommendations but also want market forces to play out. Can’t run with the hares and hunt with the hounds.

  23. If you are so much in love with the market, can you explain why even in US, time and again government has to intervene in a big way to save the market and capitalism.

    • No country, including the US, practises true free market economics. All markets are rigged in favour of the strongest player. In the US it is large companies and in India it is the government and it’s public sector units.

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