strange fever appears to have gripped the English language media. In
fact, it is not just the media that is affected : the Prime Minister,
several of his colleagues in the Cabinet, the representatives of the
Chambers of Commerce, and many of our media-appointed economic "gurus"
all seem to have caught the bug. The main symptoms of this malaise are
an obsession with the supposedly large size of the Government's
employed work force, and an irrepressible urge to cut down the number
of workers somehow, anyhow.
fever is reaching frenzy point at budget time, when concern over the
size of the fiscal deficit becomes the concern of the day, and because
reducing the size of the public sector work force seems to be the only
idea the current government has to bring in fiscal order. Not only is
downsizing presented as the best means for bringing down the deficit
by reducing expenditure on salaries, but it is optimistically seen as
a panacea for all sorts of economic ills.
we have a Prime Minister announcing proudly that the number of Central
Government employees will be cut by 10 per cent in the next few years.
As it happens, there has been an implicit freeze on additional jobs
in the Central Government for some time. Similarly, the pressure on
public sector enterprises to cut staff has been on for nearly a decade
now. As a consequence, total public sector employment has been stagnant
over the 1990s at around 194 lakh persons, while Central Government
employment actually fell by 5 per cent between 1991 and 1998, to reach
32.5 lakh employees.
the image still persists, of a bloated and incompetent public sector
in which most workers are underemployed and sitting around almost uselessly,
probably because the argument is repeated so widely and frequently.
Quite apart from the veracity of this claim, which is highly questionable,
there are important economic issues which this perception completely
take the basic issue of why we have public sector employment at all.
The sweeping middle class judgement is that all of it is the result
of political motivation to provide "jobs for the boys". But
of course, all societies require public employment, not only to provide
public goods which would otherwise not be in the private interest to
produce at all, but because of essential public services which are crucial
for both productive activity and for the welfare of the people.
makes the current discussion about excessive public employment in India
so ridiculous is that in fact thus far the state has failed quite dramatically
in providing a range of public goods and services to the majority of
people. Whether we are talking about basic transport and infrastructure
development, or adequate housing or sanitation, or universal access
to minimum health facilities and educational opportunities, it is more
than evident that the gap between public need and actual availability
is true for both rural and urban areas, and if anything, in some urban
areas the access to and basic quality of public services has even declined
over the past decade. What this means, therefore, is that the government
must spend more on such areas and therefore employ more
people, not less. If there is truth in the perception that public sector
workers are underemployed, then the solution is surely to use their
services more effectively and productively, for no one can argue that
there is no real work available for them to do. It is ironic that the
same people who demand a reduction of public sector expenditure and
employment are typically the first to point accusing fingers at the
poor condition of public services and facilities.