People working for the Indian government have a reason to celebrate. The Narendra Modi government has just doled out a Rs 1.02 lakh crore pay hike for some 10 million current and ex-employees, whose salaries are likely to get a jump of 23.55% on average. On Wednesday, the Cabinet approved the recommendations of the Seventh Pay Commission and the wage hike should follow soon.
But not everyone is happy. A section of central government employees have threatened to go on strike, arguing that the increase is not good enough. While the minimum Central government salary has more than doubled to Rs 18,000 a month now, these people say it should be raised to Rs 26,000.
The All India Defence Employees’ Federation have demanded that the government should increase the minimum pay and also throw in five promotions for everyone over the course of their careers. To press for this, some 32 lakh employees are set to on an indefinite hunger strike starting July 11, according to reports.
The government, however, is standing firm.
On Wednesday, the Finance Minister Arun Jaitley said that salaries in the public sector are “distinctively higher” than the private sector after this round of raises, so there should be no reason to complain or protest.
Jaitley wasn't making a tall claim. In pure numbers, government employees at the entry level makes much more money than their counterparts in the private sector. That was established by a survey done by the Indian Institute of Management in Ahmedabad to help the Seventh Pay Commission make its recommendations.
For instance, a driver working for the government with no experience takes home about Rs 25,000 a month, while private sector companies pay about Rs 11,000 for the same job. The trend holds for almost all jobs. According to the IIM survey, a plumber is also likely to make twice the money working for the government compared to the average salaries in private firms.
This is true even in the health sector. While a nurse in a private hospital would make anywhere between Rs 7,000-Rs 17,000 a month, government hospitals pay at least thrice that amount at the entry level. A doctor at the entry level earns earning about 60% extra by working for the government.
However, the analysis showed that as experience rises in the medical profession, wages rise more than commensurately in the private sector.
“Government pays slightly less than the CPSUs [Central government-owned Public Sector Units],” the study said. “Private sector pays highest total salary. This indicates high valuation of doctors with advanced skills in the private sector as well as scarcity of specialists.”
The only places where private sector pays a bit better at the entry level is in higher education as the salaries of professors in private universities are largely commensurate with those in the public funded institutions. School teachers, however, are better off sticking to government schools, where a primary teacher with no experience could earn twice as much as his counterpart in a private institution.
Even engineers and programmers enjoy hefty paychecks if they work with government entities in the early days of their careers. An engineer, for instance, makes more than Rs 50,000 a month in the public sector while privately held companies pay merely half of that amount on average.
While all of this means that public sector employees are much better off in their early days, the fact is that India’s entry-level wages continue to be among the lowest in the Asia-Pacific region, according to a recent study.
While the government has done well on its part to further incentivise people to work in the public sector, analysts argue that such a large salary hike wasn’t really needed.
“The results show that at every single level of education, government workers are paid more than private sector workers and more importantly, the public service advantage has increased rather than decreased after the implementation of the Sixth Pay Commission recommendations,” wrote Sonalde Desai in the Hindu last year after analysing the data from the previous pay commission.
