Centre’s Expenses On Salaries Increase, Vacancies Stay The Same: Study

“A poor country with weak State capacity like India, when confronted with the pressure to redistribute, had necessarily to redistribute inefficiently, using blunt and leaky instruments,” said the Economic Survey of 2016-17.

State capacity refers to the government’s ability to utilize resources to deliver essential services, such as education and health.

Concerns regarding the quality of government services being affected due to understaffing were raised in the 2015 report of the Seventh Central Pay Commission, the committee to review and revise central government employee pay packages.

For every one lakh people, India had 139 central government employees, compared to the US, which had 668, the report said. Understaffing is frequently manifested in protests and inefficiency.

The Central government has spent Rs 11 lakh crore ($160 billion), nearly twice Sri Lanka’s gross domestic product (GDP) in 2017 ($87 billion), on 3.2 million employees in 10 years to 2016-17; the expense rose 340 per cent, from Rs 41,676 crore in 2006-07 to Rs 1,82,513 crore in 2016-17.

In 2006, of 3.5 million sanctioned posts, only 88 per cent or 3.1 million positions were filled, a gap of 417,495 employees, the data show. In 2016, 89 per cent or 3.2 million of 3.6 million were filled, a vacancy of around 412,752 employees.

The expenditure on base pay increased 331 per cent, from Rs 27,834 crore to Rs 120,002 crore, over a decade to 2017. Employees received 157 per cent more in-hand cash, after the Seventh Central Pay Commission report and the hike in minimum wages (Rs 7,000 to Rs 18,000).

Dearness allowance (DA), additional compensation to cover cost-of-living increases, accounted for a larger share of the pay structure (42 per cent) than basic pay (36 per cent) between 2011-12 and 2015-16.

The trend changed in 2016-17, after the revisions recommended by the Seventh Central Pay Commission.

In 2016-17, basic salary formed 66 per cent of central-government salaries, followed by DA (16 per cent). House rent and other allowances made up the remaining four per cent and 14 per cent, respectively, according to the report on Pay and Allowance 2016-17.