Pay Commission makes sweeping recommendations for government staff

In far-reaching recommendations that will cost Rs 73 billion annually to the exchequer, the Fifth Pay Commission has suggested enhancement in the basic pay scales of central government employees and the house rent allowance and increase in their retirement age from 58 to 60.

The commission -- headed by Justice S Ratnavel Pandian, a former judge of the Supreme Court -- submitted its report to Finance Minister Palaniappan Chidambaram on Thursday, providing a bonanza to women employees, armed forces and central police organisations.

It has suggested that the recommendations relating to pay, dearness allowance and pension benefits should be made applicable from January 1, 1996.

The net financial implication, if all the recommendations are accepted, would cost the exchequer Rs 73 billion annually. Taking into account the retrospective effect of the commission's recommendations, the net impact in fiscal 1997-98 would be Rs 115 billion.

The commission has estimated that the annual savings on raising the retirement age of central government employees would be about Rs 15 billion annually.

It has suggested that house rent allowance be raised to 30 per cent of the basic pay-scale in metropolitan cities and from 5 per cent to 15 per cent of the maximum salary in other cities.

The commission has also suggested a drastic cut in the number of holidays for government staff from 17 to three -- Republic Day, Independence Day and Mahatma Gandhi's birthday. It has also recommended a six day week for government staff. The Rajiv Gandhi government had introduced a five day week for employees.

The government will issue orders on the commission's recommendations after necessary consultations with the major ministries.

However, government staff unions have reacted adversely to the commission's proposal to cut the central government workforce. The commission has suggested that 350,000 vacant posts be abolished.

Besides this, it suggested a freeze on further employment of junior staff with a sharp cut-back in the intake for executives.

The commission has highlighted the need for a perspective manpower plan under which there will be downsizing of numbers by 30 per cent in a ten year period.

'This could be achieved by the usual wastage through deaths and retirements, assisted by a greater number of retirements under the voluntary retirement scheme with the golden handshake and compulsory retirement of those who are to be found incompetent or corrupt,' the commission has recommended.

A special voluntary retirement scheme with a golden handshake has been proposed by the commission for departments having surplus staff. It has also recommended abolition of overtime allowance.

The commission has recommended that no holidays be declared on the demise of any leader, except the incumbent President and prime minister.

The hopes of those planning to quit the armed forces in the wake of the commission's report has been dashed to the ground as the weightage in qualifying for service pension has been increased by two years.

This means that the officers will now have to put in 22 years of service as against the earlier 20 years and the other ranks 17 years of service as against the earlier 15 years of service to qualify for pension.

The recommendation of the commission is of far reaching significance as it will ensure retention of trained manpower in the armed forces, particularly so when it is facing a crucial shortage. The army alone is said to be facing a manpower crunch of 12,000 officers.

Fighter pilots of the Indian Air Force and submariners of the Indian Navy will now get an increased special allowance of Rs 3,000 a month for the hazards involved in their jobs.

At present, these officers get only Rs 1,200 a month each for the hazards involved in performing their duties.