The Union Budget for 2016-17, which is expected to receive Parliament's approval by early May, has revealed a set of disturbing numbers that have not come under necessary scrutiny so far. They pertain to the government’s manpower strength. The focus of discussion so far has understandably been on the additional wage cost burden arising out of the recommendations of the Seventh Central Pay Commission. Much to everyone's relief, the Union Budget has made adequate financial provision to meet not just the Commission’s award for higher wages but also demands of the One-Rank One-Pension (OROP) scheme for the armed forces that the government had accepted earlier. There may be a marginal shortfall in the total expenditure allocation under this head — against an estimated additional burden of Rs 1.1 lakh crore on account of the Pay Commission awards and the OROP promise in 2016-17, the Budget provides for an extra Rs 1.06 lakh crore. Understandably, therefore, the shortfall will not pose a big problem and the fiscal challenge will be relatively manageable because of the government's pragmatic and wise move against delaying the enforcement of the Commission’s recommendations, preventing thereby accumulation of arrears unlike in the past.
But a closer look at the Budget documents reveals that that the task of maintaining fiscal discipline would have been easier if only some tough decisions had been taken to curtail the growth in the government's manpower strength. Far from containing it, the government proposes an increase in the overall headcount in non-defence and non-railway employees by over 218,000 in just two years ending March 2017. The increase is largely attributable to the manpower count going up in two ministries – the revenue department in the finance ministry (up by 81,000) and the home ministry for maintaining central paramilitary forces (up by 47,000). Indeed, the headcount in other departments has gone up marginally or remained largely stagnant – although it is a legitimate question as to why their strength should not have come down instead. If the Indian Railways could project no increase in its manpower in the two-year period, there is no reason why other departments too could not follow suit.
Cutting down government manpower poses a tough political challenge, as was seen in the last National Democratic Alliance government of Atal Bihari Vajpayee when proposals on reducing workforce in some departments and winding up a few others had to be abandoned mid-way because of pressure and resistance to change from within the top leadership. But that was a government where the Bharatiya Janata Party or BJP did not enjoy a majority on its own. In the present NDA, the BJP enjoys a safe and simple majority on its own. Nor does a decision on downsising the government, as part of Prime Minister Narendra Modi’s stated commitment to maximum governance through minimum government, need any legislative approval — which, given the ruling party’s lack of majority in the Rajya Sabha, could have posed avoidable political risks and embarrassment. Yet, the Budget envisages a healthy rise of about 11 per cent in the total headcount over the two-year period.
The government would argue that it needed more hands for collecting higher revenues and ensuring law and order in violence-prone, far-flung areas across the country. But the use of technology and improved techniques of security management should have received greater attention to bring the runaway increase in headcount in these two ministries under some check. If that were done, the challenges of fiscal management arising out of demands of higher wages would have become more manageable.
