Sixth Pay Commission:

Freezing Across the Wage Pyramid

Prime Minister Manmohan Singh announced on Feb.1 that the Sixth Pay Commission (SPC) would be constituted soon close on the heels of the central government employees' decision to go on an indefinite strike. Still, the Joint Action Forum of Central Government Employees served strike notice on 7 Feb. Serving strike notice in itself was a major event in the central government employees' movement. It was a festival of sorts all over when the employees delivered the strike notice to their authorities by taking out rallies. But, it proved to be a bubble very soon and the strike was deferred for another 60 days expecting the government to actually constitute the commission by then. The government has not conceded any other demand in the charter of 20 points except the demand for the Sixth Pay Commission.

The Fifth Pay Commission was formed in 1994 during Narasimha Rao's regime and the report was submitted after two years. Actual implementation of the report had to wait for another few years. Extending them to the state government employees took a few more years. In that sense, the periodicity of pay commission is, in fact, more than 10 years contrary to its claim.

Earlier pay commissions have not addressed the issue of paying 'need based minimum wages', the declared official policy of the central government. Payment of DA neutralizes the price level only partially. Effectively speaking, pay commissions are being reduced to neutralization commissions, in practice. Whatever quantum increase was given after the FPC was only the revenue saved by retrenchment, downsizing and rightsizing. The government's concept of hike in wages is not through increasing the real income but through cutting down the size of the workforce.

Achieving equality is said to be one of the declared objectives of the pay commissions, equality between a Class IV employee and a bureaucrat in the top slot. FPC claimed to have attempted to reduce this gap from 12:1 to 11.7:1. But now, the government is inclined towards reducing the gap not between the peon and a Class I officer but between workers of organized and unorganized sector, which effectively would mean bringing down the salary of a government employee to the wage level of workers in unorganized sectors like beedi or powerloom. On the other hand, the concept of 'equal pay for equal work' is being discussed for the people in the top end of the salary pyramid. The example of reported salary differential between CMDs in SBI and ICICI Bank (6 lakhs vis-à-vis 12.5 lakhs in a month) is being considered with concern. Raising a wall, horizontally, across the wage structure in order to effectively prevent any upward mobility of the employees of lower end, and parity of pay packets of bureaucrats at the top end of the pyramid appear to be the dominant thinking behind any pay commission today.

There is a hue and cry about making laws of labour market operational particularly to those employed in Class IV segment. Government employees of Class III and IV are expected to compete with unorganized sector workers in terms of their salary level. The policy of hire and fire, introduction of contract system, outsourcing major operations of government services, etc., go hand in hand with the approach of making government employees compete with unorganized lot of workers.

Equity is a concept aimed at spreading and expanding the frontiers of prosperity and not of poverty. But, the official thinking making rounds in corporate circles regarding the concept of wages and labour market appears to be inclined towards spreading poverty on the one hand and reserving prosperity to the upper echelons, on the other hand. Perhaps, this is the concrete attempt to create a divide, i.e., two Indias , the India of the rich and the powerful and the India of the poor and the powerless. Government of India is firmly on the side of the rich and the powerful. Sixth Pay Commission is no exception to it. In fact, it is an attempt to readjust wage policies and restructure wage structures according to the demand of the market and of the globalization.