:: Dilip Cherian

Austerity?

By Dilip Cherian

Oct 04 : Even in austerity mode, a few babus have managed to give themselves another massive salary hike. According to the revised pay scale, secretary-level officers will get 80 per cent more than they used to get under the pay commission. Additional secretaries would now be placed at a pay scale starting at Rs 67,000 a month, up from a pay band starting at Rs 37,400 a month. This means, senior additional secretaries now will get a salary more than vice-chancellors of Central universities or directors of the national institutes of technology (NITs).

Ironically, the amended Indian Administrative Service pay rules were announced barely a few days before the Central government told Indian Institute of Technology and Indian Institute of Management faculty to cut expenses, minimise travel, and reduce subsidies offered to students. Senior babus will from now on receive an annual increment of three per cent. Of course, the big question is: where will all this money come from? Only the knowledgeable babus know!

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A tough market

With financial markets behaving rather mercurially, the government is now planning to convert the high-level coordination committee on capital markets (HLCC) into a full-fledged regulator for the financial sector. Since the early 1990s, the committee has supervised and coordinated the activities of all financial entities, including the Securities and Exchange Board of India (Sebi).

Past efforts to move towards a super regulator, on the lines of the Financial Services Authority (FSA) model of the United Kingdom, met with resistance from sarkari pundits. In 2008, the current honorary economic adviser to the Prime Minister, Raghuram Rajan, termed the move as "inappropriate". Earlier this year, the then Reserve Bank of India (RBI) deputy governor Rakesh Mohan, finance ministry’s former chief economic adviser Shankar Acharya and former Sebi chief M. Damodaran also felt that the committee works reasonably well. Curiously, RBI governor D. Subbarao, who had earlier suggested the formalisation of HLCC, is now opposing the idea.

As of now, the current HLCC comprises Mr Subbarao, Sebi chief, Chandrasekhar Bhaskar Bhave, and secretary of the department of economic affairs, Ashok Chawla, among others.