On 26th August 2014, the state government of Haryana had raised the retirement age of employees from 58 years to 60 years. Earlier, the state government had increased the retirement age of Class IV employees from the existing 60 years to 62 years. This has brought a lot of cheer to the employees, especially in an election year.
The debate on the extension of retirement age of government employees in Haryana must be seen in light of the overall role and performance of the state administration and the balance between the costs of governance vs socio-economic development of the state.
A government job in Haryana is viewed by many as a ticket to job security, where the need for performance in not very critical and where time bound upgradation of position is followed by an automatic increase in salary. This unfortunate system has resulted in a large and unproductive state machinery that is slow on decisions, inefficient in performance, and a drain on the exchequer.
The problem lies in the government that views itself more as a provider of jobs than an efficient executioner of state policies, on behalf of the people of Haryana. There is no doubt on the fact that the role of the government is to create policy; supervise, monitor and audit projects.
Can Haryana afford that?
This is a question that needs further review, as the question of the logic of extending the superannuation age of government employees is related to the overall question of performance and efficiency.
The question people of Haryana need to ask is does Haryana require such a large bureaucracy and where to draw a line on the cost of maintaining this bloated structure?
In Singapore, when Lee Kwon Yew, the architect of modern Singapore, took over as Prime Minister, he undertook to make the state machinery more efficient by reducing the number of employees but increasing the role and responsibility. In addition, he also ensured that they were well paid and good work got recognized and rewarded.
In the context of Haryana, that too should be the goal where the bureaucracy is trimmed but the salary is higher but subject to performance. While governments the world over are increasingly adopting global best practices for human resource and governance, the Haryana government is still stuck in the old socialist age, where job security is paramount and salary and rewards are not linked to performance. The system to promote efficiency just does not exist.
It's not that the state government does not outsource the work at all. The best example would be the use of contractors to execute works on behalf of the state Public Works Department. In the absence of a proper checks and balance system, the system is abused thoroughly.
Outsourcing, the answer?
Take the case of Road development. Private contractors first get themselves listed on the approved contractor's list, then they form a cartel amongst themselves and decide which tenders would go to which contractor. Then they ensure that the quotes submitted by all contractors exceed the one submitted by the selected contractor for that tender. The state government awards the tender to this contractor who just happens to quote the lowest.
Only that the rate quoted happens to be substantially higher than what it should be, as the contractor factors in the payouts to various officials in the decision making chain. In other words, state ends up paying money to its officials that is merely routed through the contractor's account. This modus operandi gets replicated in various departments and tender situations, across the state.
So how did Singapore deal with this problem, as corruption was prevalent in that country too, before he took over?
Singapore reduced the size of its bureaucracy significantly and put in place strict checks and balances in supervising, monitoring and subsequent audit of state funded projects. This was backed by a strong judicial system that meted out harsh punishment to law breakers. The prosecution was swift.
The prosecuted government employee would have to pay a very hefty fine that would almost always ruin him financially, ensure that he lost his job along with all government benefits, besides a long jail sentence. This acted as a strong deterrence to corruption.
The timing of Hooda administration's decision is suspect
Roll back to Hooda's Haryana and you find that the state government itself is in the centre of scams and corruption charges. So how does one try and bring best practices of Singapore to Haryana?
The Hooda administration, as all administrations before him, have used the state as an opportunity to satisfy vote banks by providing select individuals with jobs that offer lifelong financial security. A job where there is minimal need to meet qualification criteria or performance standards and what better if one can make money along the way.
The problem is that the state has to carry the burden of supporting this employee for the rest of his working life and then continue to pay for his retirement benefits, as well. And who pays for all this? The common man of Haryana, who toils day and night, year after year just to meet his expenses.
So one is forced to ask, what made the Hooda administration extend the retirement age of employees just months before the elections in the state?
Extending the retirement age has two connotations; one for the employee in question and the other for the state exchequer. While it is very welcome that the employee, subject to his fitness, works and contributes his services to the state for another two years, the cost of this extension has to be borne by the next government that takes over, which will have to deal with the legacy of a state whose financials is in complete mess.
This was experienced by the TMC in West Bengal when it finally dislodged the Left Front but had to deal with a legacy that is proving very challenging, with the state exchequer not being able to find finances to undertake fresh development projects. That's the risk in Haryana as well.
The Hooda administration knows that it is on the way out and has made a desperate gamble to win over the state employees support. If it loses the election, the burden of balancing the budget will lie with the next government and if it wins, the cost of the gamble would be more than offset through another few scams in the new term! The Hooda administration has obviously weighed its options.