Tuesday, December 29, 2009
If insiderers in at least two important Indian government ministries are to be believed, the Centre has not really discarded the move altogether, and the announcement could come sometime during the current UPA regime, and it could be as early as 2010 though it makes more political sense to announce it three years from now possibly in an election year. But economically speaking, the government with a large fiscal deficit, could lessen the burden by raising the retirement age as it may save more money by not paying the retirement benefits such as gratuity etc. for two years though the government's salary budget would immediately be inflated.
However, such an important decision would not be taken purely on economic considerations. Yet, the proposal is still being considered for two reasons. First, it may earn goodwill from about one lakh government employees and their families who comprise an important contituent in any election. Secondly, raising the retirement age is a continuous process and the UPA may like to go down in the history as a catalyst to this process. In fact, the age of superannuation was increased from 55 to 58 following the 1962 war with China during Jawaharlal Nehru’s time. Then the BJP-led NDA governmnent under Atal Bihari Vajpayee raised it further to 60 in 1998.
Significantly, many civil servants at the top get either extension or post-retirement full-time assignments and virtually work till 62. In some cases, the retirement age is much beyond 62. Secretary in Prime Minister's Office (PMO) and 1972 batch Bihar cadre IAS M N Prasad, for example, is already officially retired and is continuing in the PMO on a contract basis. Similarly, cabinet, home and defence secretaries get two-year fixed tennure, implying that they generally work till almost 62. There are instances where the government gives further extension to an officer's extended period. Cabinet secretary K M Chandrasekhar, a 1970 batch IAS, had completed his two-year tennure as cabinet secretary in June, 2009, but got one year’s extension.
Two bureuaucrats who are much older than the rest are 1958 batch IPS and national security adviser MK Narayanan, and principal secretary to Prime Minister and 1963 batch IAS TKA Nair --- both of whom have a rank of a minister of state.