đŸ’„Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Archives: Stories

  • US policy wise : Visa, Free Trade and WTO

  • Foreign Policy Watch: India-ASEAN

  • Pay Commission Updates

    The 7th Central Pay Commission Report

    The Seventh Pay Commission, headed by Justice A K Mathur, submitted its report to the Centre in November, recommending 23.55% overall hike in pay, allowances and pensions of government employees from January 1, 2016. This means the Centre’s salary bill will go up by Rs 1,02,100 crore in 2016-17.

    The terms of reference of 7th CPC

    1. To review the principles that should govern the emoluments structure including pay, allowances and other benefits, in respect of the following categories of employees:-
      • Central Govt employees (industrial and non-industrial)
      • Personnel of the All India Services
      • Personnel of the UTs
      • Officers and employees of the Indian Audit and Accounts Dept
      • Members of regulatory bodies (excluding the RBI) set up under Acts of Parliament
      • Officers and employees of the Supreme Court
    2. To review the principles that should govern emoluments, concessions and benefits, as well as retirement benefits of Defence Forces
    3. To work out a framework for an emoluments structure to attract the most suitable talent to Govt service, promote efficiency, accountability and responsibility in the work culture
    4. To examine the existing schemes of payment of bonus and recommend general principles for an appropriate incentive scheme to reward excellence in productivity, performance and integrity
    5. To review the existing allowances available to employees and suggest their rationalization and simplification
    6. To examine the principles that govern the structure of pension and other retirement benefits
    7. To recommend the date of effect of its recommendations on all the above

    The recommendations should consider the following criteria:

    • Economic conditions in India and the need for fiscal prudence
    • Need to ensure that adequate resources are available for developmental expenditures and welfare measures
    • Likely impact of the recommendations on the finances of the States, which usually adopt the recommendations with modifications
    • Prevailing emolument structure and retirement benefits available to employees of Central PSUs
    • Best global practices and their adaptability and relevance in Indian conditions

    The above information may be helpful during prelims, though it has little relevance for mains

    Now, let’s take a look at the key recommendations

    It has recommended overall hike of 23.55% in pay, allowances and pensions of central govt. employees with effect from January 1, 2016

    • The minimum pay in govt to be set at â‚č18,000 per month
    • The  system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed
    • The Military Service Pay will be admissible only to the Defence forces personnel. <It is a compensation for the various aspects of military service>
    • Introduce a health insurance scheme for central govt employees and pensioners
    • The force personnel of CAPFs should be accorded martyr status in case of death in the line of duty. <Currently, it is accorded only to defence forces personnel>
    • Fair and equitable treatment must be given to all services; or it will widen the gap between the IAS and other services
    • A screening committee should be set up to decide on the allocation of officers on deputation to the centre on the basis of domain knowledge
    • Introduce Performance Related Pay for all categories of central govt employees
    • Take steps to improve the functioning of NPS and establishment of a strong grievance redressal mechanism

    Now, let’s analyse various issues pertaining to personnel in govt. sector.

    It is a long-pending debate that there are huge disparities between private sector and govt. employees in terms of salaries.

    Let’s analyse the difference in salaries of private and govt. employees

    • Compensation to Group C and D employees in govt. is greater than the private sector.< More than 90% of the workforce employed by govt. lies here>
    • For Group B employees, it is similar to private sector <Govt. workforce includes approx 5% group B employees>
    • However, for Group A employees, it is lower than private sector <Govt. workforce includes less than 5% group B employees>

    Govt. job offers added benefits, which are not available in private sector

    Pay Commission on Performance Related pay (PRP)

    What is it : Paying salaries or wages based on performance

    Rationale: Human beings respond to incentives. Recognition for good effort and achievement through an incentive is expected to energize and motivate officers to perform even better

    What’s the problem in implementing such a scheme?

    1. How to measure performance of an organization when targets are more in the nature of social and public goods which may not even be tangible?
    2. How to distribute credit among various departments for such larger public good?
    3. How to separate individuals from collective?
    4. How to prevent PRP degenerating into routine entitlements?

    The Commission notes it may be easier to implement such schemes in profit-driven private organizations where targets based on quantitative criteria make performance appraisal easier.

    Pay flexibility reforms are not a silver bullet, and involve trade-offs and risks. A study of the literature on the subject reveals that employee motivation and performance are not exclusively linked to Performance Related Pay (PRP) which may only enforce temporary compliance.

    Yet evidence from many countries indicates that pay flexibility contributes to management improvements, promotes an atmosphere of dialogue, rewards teamwork and is helpful in efficient task allocation.

    Two important aspects to be kept in mind before evolving such a scheme:

    1. Evolve proper criteria to measure performance along with setting a context where individual and organizational goals are clearly aligned
    2. Devise a performance appraisal system in which the objectives of the appraisal system match with that of the reward system

    Recommendation

    1. Results Framework Document (RFD) can be used as the primary assessment tool for linking the targets of the organization with that of the individuals
    2. Suitable changes in the Annual Performance Appraisal Report (APAR) can provide the necessary link between targets of the appraisal system with those of the RFD document

    Let’s see some of the critical observations of 7th CPC

    • The core of govt. employees (excluding security and commercial department) is very small
    • Pay, allowances and pension as a proportion of govt. expenditure has been declining sharply. <In 1998-99, it was 38% of revenue expenditure, which has reduced to 18% in 2015-16>
    • Pay and allowances in the central govt. have remained stable since 2010-11 at around 1.8%-2% of GDP
    • Impact of the pay hike will be .65% of the GDP. However, some increase in the salary comes back to govt. as taxes, reducing the net impact

    Often, it is argued that Indian govt. employs less people in proportion to its population. Let’s take a look at it.

    Why govt. should hire more?

    • Indian govt. employs less than 1.5% of its population with respect to China which employs 3% of its population
    • The number of personnel per lakh population is 139 for India, against  668 for the US
    • 7th CPC notes there is overall vacancy of around 18% of sanctioned strength
    • It has also observed that sanctioned strength is not adequate to deliver adequate governance

    Recent Developments

    • The Union finance ministry has set up an implementation cell for processing and implementing accepted recommendations of the 7th Pay Commission
    • Recently, several States have approached the Union govt. seeking more time in implementation of the Commission’s report.

    India should implement the recommendations of 7th CPC and II ARC together, reflecting the new mindset. Govt. should be ready to pay its public officials well, increase their strength and invest in building competence.

    It’s time for some questions:

    1. Pay commissions are relics of an age when India was a closed economy and govt. was the major employer. This archaic model has no role in today’s economy and it’s high time India scrapped the system of setting up pay commissions. Comment.
    2. Private organizations are generally thought to be more efficient than government organizations. What could be the possible reasons for this? How can we make our government system more efficient?
    3. Salary hikes are generally linked to performance. This truism of management is totally lost in the public sector, where duration of employment is linked to salary hikes. Keeping in view of the recommendations of 7th Pay commission, discuss the pros and cons of performance related pay.
    Published with inputs from Pushpendra

  • Policy Wise: India’s Power Sector

  • Make in India: Challenges & Prospects

  • Contention over South China Sea

    • Why in news?
    • Background
    • Importance of South China Sea
    • What is the case about?
    • Are Chinese claims valid?
    • What next?
    • India’s involvement in issue
    • Further role by India

    Why in news?

    • The Permanent Court of Arbitration at Hague has declared that China cannot claim any historic rights over islands in the South China sea. The tribunal also ruled that China has violated Philippines’s sovereign rights.
    • The dispute had been raised by Philippines in 2013. However, China had refused to participate in the tribunal proceedings, questioning jurisdiction among other things.
    • After the tribunal announced the verdict, China has officially announced it has neither accepted nor recognised the award of the tribunal.
    • This award had been looked forward to by many countries including India and USA, both of which have strategic maritime as well as economic interests in the region.

    source

    Background

    • The South China Sea is located at the western edge of the Pacific Ocean, to Asia’s southeast.
    • It encompasses an area of about 1.4 million square miles and contains a collection of reefs, islands and atolls, including the Spratly Islands,Paracel Islands and Scarborough Shoal.
    • China has been claiming the historic control of over 85% of South China Sea, while countries like Philippines, Malaysia, Vietnam, Taiwan and Brunei also have been making competing claims.

    Importance of South China Sea

    • It is a 3.5m sq km waterway.
    • One of the world’s most strategically vital maritime spaces.
    • More oil passes through here than the Suez Canal.
    • More than $5 trillion in trade flows through its waters each year. That is a third of all global maritime commerce.
    • The Strait of Malacca that links Indian and Pacific Oceans handles four times as much oil as Suez Canal.

     What is the case about?

    • Philippines brought its dispute with China to international arbitration in January 2013, despite Beijing’s warnings of a diplomatic and economic backlash.
    • The Philippines asked a tribunal of five arbitrators to declare as invalid China’s vast claims, known as nine-dash lines for the dashes that demarcate virtually all of the South China Sea as Chinese territory, under the United Nation Convention on the Law of the Seas, or UNCLOS.
    • The Philippines also asked the tribunal to classify whether a number of disputed areas are islands, low-tide coral outcrops or submerged banks to determine the stretch of territorial waters they are entitled to under the convention.
    • It also wants China to be declared in violation of the convention for carrying out fishing and construction activities that breached the Philippines’ maritime rights.

    Are Chinese claims valid?

    • China had joined UNCLOS long before and has accepted international jurisdictions.
    • However, their current discourse is that China was not the party to the rule making and hence, China has some hesitation in fully following the UNCLOS provisions.
    • The Chinese proposal is that SCS is a territorial sea which means that freedom of navigation would be problematic, although they clarified that they are not obstructing the freedom of navigation or have obstructed before.

    What next?

    • The award can’t be enforced as Chinese have rejected it.
    • What is going to be instructive is how China will respond as PCA doesn’t have any enforcement mechanism.
    • UNCLOS has made it very clear that if a country has equivalent of manmade islands, which is what is at dispute here, the country does not have a maritime entitlement.
    • There is a claim which says that China’s territorial water goes up to 2000 kms!! which is quite untenable.
    • Thus, Chinese response is going to be very critical. However, the first sign of foreign office statement from Beijing has been very categorical. They have used ‘null and void’ to answer the verdict, which is very strong.

    India’s involvement in issue

    From India’s perspective, the freedom of navigation and overflight is critical for two reasons:

    • Lot of India’s trade passes through SCS. Therefore, India cannot accept the situation where India is dependent on the goodwill of Chinese for transit.
    • If China manages to establish its sovereignty over these islands and waters, then it becomes a very important base for its power projection in the Indian Ocean. This is what concerns India.

    India is at present, not taking sides between the contestants in the dispute. So, the Indian position is balanced. At this stage, when it is talked about geopolitical dimension, India should continue this stand.

    Further role by India

    • The role India could play while awaiting China’s response is to engage in a chat with Beijing and cite the India-Bangladesh example that there is a case of principles and that India is taking no position on territoriality but is talking about the way in which maritime practice and law must be respected because that has bearing on the larger issues of global order.
    • India can try to deal with each of the major stakeholders in its own way as it has in the past.

    References:

  • Foreign Policy Watch: India-Southeast Asia

  • Foreign Policy Watch: Indo-Pacific and QUAD

  • Antibiotics Resistance

  • BRICS Summits

    Importance for Exams

    Mains : This year is special because India holds chair of the BRICS Summit from February to December. Though the exact outcome of all the Conferences, Meeting, MoUs, Declarations leading to the main Summit is not important, the themes being discussed are independently very important.

    Prelims : All the declarations(Jaipur, Udaipur, etc), places(Khajuraho) where meetings were held and other keywords(like the BRICS Wellness Index) are important from a prelims perspective.

    In News

    The 2016 8th Annual BRICS Summit will be held in Panaji, Goa, from 15th to 16th October. The theme this year is Building Responsive, Inclusive and Collective Solutions. It will be attended by the heads of state/government of the five member states Brazil, Russia, India, China and South Africa.

    Timeline

    September – Events and Outcomes
    1 -2 Sept – BRICS Convention on Tourism, Khajuraho
    2-6 Sept – BRICS film festival
    10-11 Sept – BRICS Wellness Workshop, Bangalore
    The Ministry of AYUSH, in collaboration with Research and Information System for Developing Countries (RIS).
    14 Sept – BRICS Joint Working Group on Counter Terrorism
    16 Sept – BRICS Environment Ministers.
    GOA MoU on setting up of JWG environment-related issues
    14-16 Sept – 3rd BRICS Urbanisation Forum, Visakhapatnam
    17 Sept – MOU on Climate co-operation

     

    August – Events and Outcomes

    1-2 Aug – BRICS Workshop on Strengthening Health Surveillance, Bengaluru
    22 Aug – BRICS Women Parliamentarians’ Forum, Jaipur
    Jaipur Declaration – Enablers for achieving SDG
    22-23 Aug – 2nd meeting of the BRICS Ministers of Disaster Management, Udaipur
    Udaipur Declaration – to enable Disaster Risk Management