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Desai challenges India’s pay commission-mandated salary hikes

Sees scheme as a propeller of undue advantage to public sector employees

Annual salary increases spanning one decade, proposed by India’s Central Pay Commission (CPC), have entered their sixth year, costing the national exchequer 900 billion Indian rupees [$13.6 billion]. The incremental salary increase was intended to address inequalities in income across different government departments, and between the public and private sector. It is the latter rationale that faculty associate Sonalde Desai challenges in her latest article in The Hindu.

Using data from the India Human Development Surveys (IHDS), Dr. Desai is able to show that on average, government employees earn higher salaries compared to private sector employees, for every level of education extending from primary to graduate. This analysis excludes other perquisites that may accompany government salaries, including housing and health benefits. Therefore, using salary hikes for government employees as an equalizer between the public and private sector is based on a “false premise,” and continued excess expenditure on government salaries may divert resources away from programs that have the potential to translate into public benefit.

See complete story in The Hindu