On 21st March 2013, there was an unstarred question in Rajya Sabha,
about whether there was a proposal to increase the retirement age of
Central government employees. The relevant MOS answered there was no
such proposal. That’s not quite true, because there is such a proposal
floating around and it went to Cabinet sub-committee and an in principle
decision to implement was taken by Department of Personnel and Training
(DOPT). One should not mix up existence of a proposal with a decision
about implementing it. Evidently, a decision has now been taken to
increase the age from 60 to 62 years, the last time such an increase
took place was in 1998, when there was an increase from 58 to 60 years.
Whenever such a decision is taken, debates centre on the big picture.
What are arguments for? First, life expectancies are increasing. There
is a shortage of good people within government. Let’s tap this
expertise. Second, in any case there are extensions in “exceptional
circumstances”. But that’s arbitrary and can be shot down by the
Appointments Committee of Cabinet (ACC). Why not formalize the system by
allowing extensions to everyone? The trouble with this argument is that
there will be no finality about 62 either and there will be
“exceptional circumstances” beyond 62.
Third, there should be parity. Professors now retire at 65. High Court
judges retire at 62, Supreme Court judges retire at 65. The
counter-arguments of the big picture are also obvious. India is a young
country, young need employment opportunities. Promotional avenues of
existing civil servants get blocked. Often, in the private sector,
people retire at 60 and there are extensions, with the qualification
that extensions are at consolidated monthly emoluments, with no perks.
An increase in retirement age occurs with all perks. Therefore, there
are significant fiscal costs. While these big picture arguments and
counter-arguments are important, my problem is that such decisions
aren’t taken because of logical coherence. They are ad hoc decisions,
driven by myopic motives. First, increase in retirement age postpones
the one-time superannuation burden of severance payments by around Rs
5000 crores. For a government that has drawn up red lines on deficit
numbers, that’s a desirable objective, even though it is myopic because
it increases fiscal costs on future governments. Second, there’s a clear
political cum electoral motive. Outright, if we include Defence, we are
talking about 1.5 million Central government employees.
In a broader sense, we are talking about something like 6 million,
excluding State governments and quasi-government, all urban. This is
therefore a significant component in that 65 million urban household
figure. These two points will also be made when the 62 decision is
announced. But the one that bothers me most is a third element, one that
is invariably never talked about. Such ad hoc decisions are taken
because of specific individuals. There is one particular individual whom
government wishes to place in one particular position. Once he is
placed there, government wishes him to benefit from increase in
retirement age. But to ensure he is placed there, one needs to ensure
those who are senior to him get out of the way first. After all,
supersession is not desirable. Hence, announce the decision after some
people have retired at 60 and exited. This is the way decisions are
taken. At one level, there is no point complaining, because we have
accepted corruption of institutions and systems as fact of life. But
when this 62 decision is announced, as it soon will, let us not pretend
there are any big picture considerations involved.
[http://blogs.economictimes.indiatimes.com/policypuzzles/entry/increase-in-government-retirement-age-to-62]
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