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High court fiat hits MP downsizing plan

Rahul Singh in Bhopal

Madhya Pradesh Chief Minister Digvijay Singh loves controversies. "Controversies reflect," he says, "how effective a chief minister is". Going by the current pickle he's landed himself in, he's pretty much in the top order.

His government finds itself neck-deep in a controversy following its attempts to downsize the bloated bureaucracy and to introduce austerity measures in the face of a frightening debt of Rs 214.8 billion.

The Madhya Pradesh high court has stayed the retrenchment of daily wage employees. Pressure is also mounting on the government from the powerful trade unions lobby, and the opposition parties are putting major hurdles in reforms.

The retrenched daily wagers, with help from the trade unions, have launched an agitation in Bhopal, which entered its 14th day on Thursday. The strike has affected civil services, including drinking water supply in parts of the town.

On January 18, the high court stayed the termination orders of daily wage employees of the agricultural produce committees and various municipal corporation and municipal committees appointed after January 1989.

But even before the court order came, the government, feeling the heat, re-employed the retrenched 225 daily wage employees of the Bhopal Municipal Corporation.

But the chief minister hasn't given up. He has already retrenched 28,000 daily wagers and says 13,000 more will have to go. The government plans to downsize its staff strength by 30 per cent. This is probably for the first time in the country's history that any government is seriously attempting to reduce staff.

The move, which was recommended by the Fifth Pay Commission, would scrap 250,000 out of the total 750,000 posts. It will not only save Rs 1.5 billion per month, but also potentially reduce red tape considerably.

To save money, the government is planning to pay sit-at-home salaries to employees of the Mining Corporation and the Optel Telecomunication Limited. Says Singh: "Even then we will save money on office space, electricity, phones, TA (travel allowance), DA (dearness allowance) etc."

The cash-strapped government has already declared a financial emergency, tabling a white paper on its financial position in the state Assembly. The paper underlined that the government's job had been reduced merely to the distribution of salaries to its employees. Three-fourth of its total revenue is spent on salaries alone. The total establishment cost is close to 85 per cent of the total receipts.

The state government's overdraft stood at Rs 25,000 in November last year. It has now to borrow to repay the interest amount on the loan. The development process has been badly affected, with 35,000 kilometres of road lying in disrepair due to the lack of funds.

The government has announced a number of austerity measures like restrictions on air travel, mobile phones, STD and petrol limits. But it isn't above striking political deals.

For soon after the "austerity" announcement, the government bestowed cabinet rank on all former speakers of the state assembly. Now the former deputy speakers of the state assembly are also seeking the same facilities.

This week, the government hired a private charted accountant at Rs 40,000 a year to solve its ministers' income-tax problems.

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