The main recommendations of the Sixth Pay Commission headed by Justice B.N. Srikrishna seek to narrow the gap in the compensation levels between the public and the private sectors. They also aim at imparting greater accountability and encouraging technology absorption by the Central government staff. The across-the-board increase in emoluments — the rise touching 40 per cent in specific cases — might be its most visible recommendation and, in the context of the general rise in employee compensation in the private sector, no one would grudge them their due. This proposal should not be taken out of context or considered in isolation. Notably, the commission has proposed performance-based incentives for certain categories. For the first time ever, the Central government staff will have a performance-linked variable component in the pay packet. However, realistic and transparent benchmarks are necessary. Another salutary feature is that the employees will be fitted into four broad salary bands and the number of pay scales brought down to 20 from the existing 34. Employees who have reached the maximum in their time-scale will not stagnate but automatically move into the next salary scale — a proposal that will do away with many types of anomalies in the salary structure and boost morale.
The proposed hike in the emoluments of defence personnel to bring them on a par with civilian employees both at the entry and the senior levels is long overdue. The army has been experiencing a serious shortage of officers. The proposal to induct into the highest echelons of the administrative machinery professionals from outside the regular services is basically sound and has already been tried out. Statutory regulators such as SEBI and the Competition Commission can, with the special pay scales, hope to attract and retain talented people. Sooner rather than later, the public sector undertakings including banks should be freed from the necessity of toeing the Central government line in the matter of emoluments. The Sixth Pay Commission’s recommendation will cost the exchequer Rs.7,975 crore during 2008-09. In addition, arrears will cost over Rs.18,000 crore, and they would be paid over two years. Altogether, with buoyant revenues, the Central Government and the States that will soon have to contend with the question of pay revision are in a better position now than they were after the Fifth Pay Commission. The new scales should serve to enhance productivity and improve the delivery of public services.