The demand by bank officers for a hike of four hundred per cent in their basic pay is nothing short of preposterous. The macro impact of this is unimaginable. The sheer irresponsibility of an influential segment of the organised working class will soon be matched or possibly improved upon by others and this will have grave implications for economic management overall. Bank staff have so much clout that they will not allow any pruning of the workforce. This is hardly the way to prepare a crucial component of reform for the challenges that are emerging. Bankmen have their patrons in high places and this will ensure that their interests continue to be advanced totally regardless of their want of professionalism.

The Fifth Pay Commission for Central Government employees has been pressurised into making extravagant recommendations and the fiscal impact of its report is going to be enormous and any talk of structural adjustment becomes irrelevant when the Government yields readily to various pressure groups. The spread of wage-related populism is hardly calculated to boost the nation's cost efficiency, precisely when this is increasingly needed to promote India's trade interests in the global arena. In any case, the organised working class, particularly the high wage islands, enjoys so much influence that it would always get away with everything.

Yet, something drastic has to be done to put a stop to exploitation by the national trade unions. The national labour conference has to address itself strongly to making the powerful unions function with a lot of responsibility. In respect of wages and salaries in the public as well as private sector, there has to be a national debate on ways to link remuneration to the corporate top brass as well as workmen to the need to promote a cost competitive environment generally.

To the extent that representations to the Fifth Pay Commission and the wage demands of bank officers and subordinate staff have been influenced largely by the anarchy prevailing in respect of compensation to top and senior managers in the private corporate sector, there is no escape from a strategy that would ensure responsible fixation of pay packages to corporate managers. The Union Finance Ministry has to take an initiative in the matter.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.