VOX POPULI

Or

OPinionatED

by

 Aam Admi

Issue: 159                      Date:  11.07.2016

Contents:

1.       India Has Got 3 New Castes

2.       24/7 Working of Commercial Establishments & Of Women Not A Good Idea

3.       The 7^th Pay Commission Will Create Problems

India Has Got 3 New Castes

We have this case in Goa where the Chief Minister's brother-in-law, Mavalankar, working in GIDC - Goa Industrial Dev Corpn, was caught red-handed while accepting a bribe of Rs. 50,000/- for allotting an industrial plot to an industrialist. While Mavalankar was arrested at the time of the incident, he has since been re-instated in his post at GIDC while the investigating police official and the SP in the ACB - Anti Corruption Bureau involved in the case have been transferred out. Mavalankar was re-instated by the Industries Secretary over the heads of the top management of the GIDC. While this is a clear case of misuse of office by the Chief Minister Laxmikant Parsekar, he has defended the re-instatement claiming that procedures were followed and that Mavalankar should not be victimised just because he is the CM's relative. The comment by the CM about the police officials transfer was that their terms were over in those posts and the due transfers were routine. Strange coincidence that! This is clearly turning the matter on its head since the proper procedure was that Mavalankar should have been kept under suspension until the investigation was complete and if proved innocent, he could have been re-instated. This matter shows the obstinate attitude, obduracy and pig-headedness that is exhibited by our politicians not only in Goa but across the country in recent times since they seem to believe that there is a separate justice system for them. If you ponder on this matter, the politicians may be correct since in modern India three more castes have been introduced in our society - the politicians, the wealthy and the well-connected. These categories of people are of the firm belief that any rules of our society like law and order do not apply to them and they are immune to action taken by the authorities and/or the judiciary.  Politicians believe that the immunity is theirs by right, while the wealthy think it can be purchased and the well-connected believe that it can be managed for them. This is the reason for political dynasties to continue since if they leave politics then the immunity goes away. With the wealthy as long as they have the money, they can purchase the immunity. Around us you will find everyone aspiring to be well-connected since that earns them the immunity. Strange indeed are the ways of life in present day India. Postscript: If you look at the race strife that has struck the US in recent times culminating in the Dallas sniper shootings, you will notice that the US also has the three new castes cited above and added to that is colour. So every country around the world is caste-ridden, each to his own, and it is not that we in India only have it. But maybe the manner in which we enforce caste in our society particularly in our rural settings is something that is very distressing.

24/7 Working of Commercial Establishments & Of Women Not A Good Idea

A couple of months ago the government announced a regulation allowing women to work in the night shift. The idea behind this was that women should be given equal employment opportunities compared to men. The move is laudable but then it is fraught with danger. Across India our society is unable to provide security to women and ensure their safety in normal hours and then how can we believe that they will be safe during the night hours? We have seen the mushrooming number of incidents of women being assaulted and raped around the country from age 5 years to 62 years with the cases even rivaling in brutality the Nirbhaya case in Delhi sometime back. We have also had cases of women being raped at night on the Mumbai suburban train network. Thus when the government is unable to provide safe transportation and security for women at night it does not make any sense in allowing then to work on 24/7 basis.

In the same light needs to be seen the recent regulation which gives relaxation to shopping malls, cinema complexes and commercial establishments to remain open on a 24/7 basis. This is understood to have been done so that employment is given a boost assuming that if these establishments remain open through the night they will create more jobs. Here again the issue of safety of people is involved both of the public and those working in these establishments. The same problem of having public transportation through the night is crucial since not everyone has their own transport or can afford a Uber or Ola cab, not that they are completely safe. If a blanket sanction is given for commercial establishments to remain open round the clock we will see a spurt in crime including a sharp rise in assault and rape cases against women.

The 24/7 working proposal is well conceived but needs to be implemented with caution in stages or on a piecemeal basis. Nowhere in the world do you have all establishments open through the night across the city.  Thus certain parts like downtown areas in our urban centres where the entertainment and eating outlets are located can remain open in the night. In fact the choice can be left to these establishments up to what time they would function since they know best what is good for their business. Essential services like pharmacies can be allowed to remain open on 24/7 basis though the choice can be left to them. The same applies to wholesale markets which could function to their peak business times which extend to the wee hours of the night. Thus it is best that in the framework of the government approval to operate round the clock, the commercial establishments themselves decide on an individual basis or on a locality or association basis decide how late they would function. This would also leave the police to breathe easy since they are already overstretched to deliver on their responsibilities to prevent and limit crime and of maintaining law and order. The government is also advised to refrain from announcing measures without rationally thinking out the ramifications these will have on the female members of our society. 

  

The 7^th Pay Commission Will Create Problems

The current BJP led NDA government came into office on the promise of a lean government that would concentrate on governance. Now with two years having passed the present regime seems to have thrown these promises out of the window. This assertion is being made based on the fact that a couple of months back the government announced that it had decided to recruit another 200,000 people for its various departments over the next 3 years. Then lately it has announced pay hikes to government employees by accepting the recommendations of the 7^th Pay Commission. It is another matter that the central government and the railway-men unions have not accepted the quantum of increase given them in this round and have threatened to go on strike since they want more of a wage increase!

The 7^th Pay Commission will not be limited to Central Government staff alone since progressively it will be implemented for staff  in State Government and also quasi- government institutions. This will lead to a massive outflow of money on a recurring monthly basis as also towards payment of arrears. Though at this time with the 7^th Pay Commission being applicable from Jan 2016, the arrears and their impact on the economy are relatively less. However what the government is not taking into account is the fact that this salary hike for employees in the government and the public sector will have repercussions in the private sector. There will be pressure by the employees in this category for increases in salary which the small industries and MSME sectors will find it difficult to grant. The same applies to the services industry where at the lower rungs, employers may not be able to hike salaries so easily. The banking sector will follow with their demands for salary hikes and in fact the bank unions have called for a strike on this issue shortly. Thus implementing the 7^th Pay Commission will bring in tension and uncertainty in the workplace which is not desirable particularly at this juncture since both, industry and the services sector, are not growing.

It is a known fact that our government departments are overstaffed and it is also known that the efficiency of government functioning has not improved over the last decade or more and definitely not over the two years that this NDA government has been in office. Therefore the salary increase is completely unwarranted. Moreover with industrial production showing stagnation it will only fuel inflation. It is expected that more money in the hands of the people through the salary hikes will give a boost to demand. But this is not likely to happen since industry is stuck with lack of confidence to do fresh investment and is tied down with the banking system in resolving their existing lines of credit embroiled as NPA's. We will thus be left with a situation of stagflation with prices spiraling sky high and uncontrollably. It will then not be long before we end up like Venezuela of some or the countries of Africa where food is beyond the affordable level of the people let alone other daily necessities. What the government needs to realize that there is a larger world outside the salaried and pensioned sector who are not protected by salary or emolument hikes. Like the urban poor and those involved in agriculture, where growth has been stagnating either because of bad monsoon or structural reasons and there is less money in the hands of the rural people. Again retirees who are not part of pension plans. All these people will be impacted severely with the expected inflation from implementation of the 7th Pay Commission recommendations. It may be the question of even starvation for some of these kind of people.

The seeds of inflationary tendencies in the Indian economy were sown by the UPA when they implemented the 6^th Pay Commission's recommendations. At that time it was thought that the government employees had not got a raise for quite a long time and they should be given the salary increase to fight rising prices. It was also thought that a hike in salaries would reduce corruption since the belief was that if the employees could make ends meet by legitimate means, they would resort to lesser demands for bribes etc. This was the salary model that was followed in Singapore, where the government employees are paid handsomely and Ministers are paid equivalent if not higher than a CEO in a private sector firm, thus almost eliminating corruption. But despite the 6^th Pay Commission wage hikes, corruption in India while interacting with government employees did not go down. Thus again going through a raise with the 7^th Pay Commission is completely unnecessary and in fact wasteful.

Even with the 6^th Pay Commission there had been recommendations by economists that the wage hike could be linked to productivity benchmarks for the government employees. Additionally it was recommended that the salary arrears payable could be kept in fixed deposits which could be withdrawn after a period of 3 years at the choice of the employee. This measure would have ensured that government was infused with efficiency and the inflationary impact of the arrears could be contained.  This was not done and the foundation for a high inflation economy was set at that time which effects we are seeing today. In fact even for the 7^th Pay Commission the same thing should be done and productivity-linked wages should be hammered out with the unions and the arrears kept safely in fixed deposits to contain inflation.

Instead of doing that Arun Jaitley, Finance Minister, who is more of an advocate than a finance man or an economist, has already had meetings with the Central Government unions promising a hike in the minimum wage from Rs. 18,000 a month. He has also the other day while speaking of the banking sector woes stated that the savings rate for bank deposits should be cut since that raises the cost of operation of the banks. With 46% of India’s savings in bank deposits, Jaitley’s suggestion is that these should be moved out to investments in shares, mutual funds, bonds etc. which are essentially are floating market devices. This is completely stupid since those who desire fixed income from bank deposits should not be forced to consider moving their savings to riskier methods of investments. There is a large population mostly among the middle-class who are not pensionaries and who depend on the steady income from bank and postal deposits but who unfortunately do not have a voice since they are not a vote bank. This category of people will be thrown into uncertainty by the Finance Minister’s utterances which clearly outlines what the future will bring. This class of people is already seeing the impact of inflation on their savings which will be further diminished or made risky by the government’s new policies.

Thus overall the 7^th Pay Commission recommendations should be scrapped or at least held in abeyance so that they do not further add an impetus to inflation which has been plaguing our economy for long. The recommendations are also to be seen as a populist measure on the eve of elections to States like UP which are critical for the BJP to win for comfortably passing legislation in Parliament. Another aspect of this wage increase for government employees is that Parliament in the next session will be seeing a bill to raise the salaries and allowances of our MP’s. Thus the Finance Minister can claim that having implemented the 7^th Pay Commission recommendations for the people what wrong have the MP’s done and do they not deserve compensation for rising prices? This is how our country works with those wielding the reins of power driving the horse to where it is most advantageous for them.

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