(Brig GB Reddi)
As per media reports, KCRs government in Telangana is considering the proposal to increase the pay of MLAs in Telangana from Rs. Ninety Thousand to Rs. Three lakhs per month, a whopping 200% pay hike proposal. Surely, it is highly thoughtless and highly imaginative.
For example, even the current basic pay of President of India (Rs.1, 50,000/-), the Prime Minister (Rs.1, 50,000/-), the Chief Justice (Rs.1, 50,000/-), the Cabinet Secretary (Rs.90, 000/-), the Chiefs of Armed Forces (Rs.90, 000/-), the Principle Secretaries equivalent etc., functioning at the highest levels do not presently draw such pay scales.
And, as per the 7th Pay Commission Revised Pay Scales under consideration, their current basic pay scales are merged with the Dearness Allowance with an additional 15-20 per cent fitment enhancement: Cabinet Secretary and senior most IAS officers, Chiefs of Armed Forces and equivalents at Rs. 2,50,000/- ; and others scales suggested at Rs.2,25,000/- and below.
So, any consideration to fix MLAs basic pay scales at Rs.3, 00,000/- per month needs reconsideration.
In retrospect, even the 7th Pay Commission recommendation needs to be considered with due diligence taking into account the state of financial health of the nation and inflation likelihood what with the incomes of majority in the unorganized sector remaining static.
Surely, it is bound to trigger a vicious chain reaction of protests and agitations by not only the employees of the organized sector but also by those in the unorganized sector.
Most important, India will no more be “low-cost and low-wage” destination for FDIs to invest.
India is delicately poised at the cross roads; similarly even the States are delicately poised. Any financial outstretch beyond the revenue generating capability is bound to adversely affect the growth and development story.
What is needed most importantly is austerity in governance. Undeniably, those few elected representatives enjoying power are bent upon taking the nation on a self destructive path by demanding 200 per cent pay hikes without realizing their adverse chain-cycle fallout.
Most ironic, quite a few reasons are being given to justify the proposed hike. One, since majority of MLAs hail from the middle class, they cannot bear the financial burden of meeting the extra expenditure incurred by them to fulfill their responsibilities on account of their jobs. Two, their existing pay scales in comparison with the MLAs of Punjab and Delhi are low. Three, they do not have other businesses and industries to earn incomes. Four, enhancement of pay scales is also considered vital to eliminate political corruption.
As per media reports, a whopping Rs.20 to 30 crores have been spent to meet KCRs grandiose personal projects like the “Yagam”, Special Mercedes Bus, Bullet Proof Escort Vehicles, Hiring private Jet for China tour (returns so far appears negligible) etc.
What is most disturbing is when the State is facing a severe draught and nearly 2000 farmer suicides have been reported out of which barely 500 families have been compensated.
Yet another irrefutable fact is that the KCR government is demanding additional fund allocations from the Central Government to meet its bludgeoning expenditure.
And, the KCR government cannot impose tax burden on the people to meet bludgeoning government expenditure what with its functional style remaining the same as before.
Due to such extravaganza, there will be barely any revenue surpluses left for undertaking development projects. Either the government has to take loans or depend on FDIs to promote development thereby leaving the future generations with a heavy dose of repayments and interest load.
Most significant to note is the justification advanced that the pay scales of all its elected representatives from grass root level upwards and also the government employees have been increased in 2015.
The moot question that the KCR government needs to address is that the pay scale enhancement to others is only 100%; but not 200% proposed for the MLAs now.
Surely, it will give enough scope for all others in the state machinery to launch agitations and protests to enhance their pay scales also by 200%.
What about others in the non-government sector? Their earning would remain at the same subsistence levels as hitherto fore. Constituting the majority, they have every right to escalate their demands in every field.
The demand for enhancement of pay scales and extravagant expenditure is definitely moving Telangana away from austerity and plunge the state into economic crisis. It is quite common for critics to highlight that austerity policies will adversely impact growth and development.
In contrast, to stimulate growth through increased investment and looser fiscal policy to promote development is not a sensible thing to do. It is an irrefutable fact that low public spending and low wages attract capital.
The lesson of economics is simple: debt-laden economies would suffer dramatic collapses.
Even the Central Government cannot go on allowing overdrafts since the banks health are in a poor state already. After all, the Central Government is already facing a challenge to bail out SBI and other public sector banks which have accumulated huge bad debts.
Unless the Telangana Government improves its credit-worthiness, it cannot even raise loans or issue bonds to meet its extravagance.
No more political leaders can fool the people all the time. Earlier they realize it the better it is for them.
As the weather God has played truant despite the “Yagam”, the future looks bleak on the agricultural front. More importantly, if the monsoons get delayed or become highly erratic not in consonance with the Khariff and Rabi seasons in 2016-2017, the overall situation would become gloomy. So, the urgent need is to tighten the belt and implement austerity measures until the overall situation shows marked improvements.
In sum, the time is now or never for the KCR led regime to implement austerity across the board particularly reining the expenditure on account of his MLAs and the government machinery. The current 200% hike proposals place them above the President and all other highest dignitaries of the land. Surely, MLAs cannot be placed on a very high pedestal above them.
The more logical thing is to reconsider the issue of pay hikes in comparison with the pay hikes recommended by the 7th Pay Commission for all others including pay and allowances hikes proposed for the MPs in totality and wait for their final approval. Thereafter only, fix the MLAs pay and allowances after fixing their relative status. Surely, arbitrary decision and announcement would result in criticism and sway majority opinion adversely against the current regime.