Raising of Retirement Age of CGEs– It is only a postponement of committed liability

The hot talk and the debate going around in the minds of the Central Government employees now a day is whether the Union Government is contemplating to rise the retirement age from 60 to 62 years. The talk has been necessitated due to the reliable press reports as well as systematic leakage of the news, on the subject. 

2. The lucrative perks and other incentives offered in the IT and other manufacturing sector paved the way for a new era and line of thinking in the minds of job aspirants. The shift of preference of educated younger generation started to these sectors in the last few decades and the resultant causality was Government sector, which became lesser attractive. However, the trend has now changed due to the global meltdown and recession. The on going unceremonious sacking, contractual nature of job and reduction in salary and other perks now faced in the IT and other private sectors due to the economic recession has once again compelled the job seekers to once again shift their preference and there are many takers for the Government and PSU banks. In the context of India, the down turn continues and the latest on job loss as per the statistics released by the Labour Bureau is quite alarming. About 5 lakh jobs were estimated to have been lost during the period October – December 2008, followed by 2.80 lakh during Jan-Mar 2009 and 1.31 lakh during the second quarter of the current year. The worst hit sectors in unemployment are textiles at 1.52 lakh, followed by IT (48000) and gems and Jewellery (28000). This down turn is taking place despite the stiff posture adopted by the economic think tanks and policy makers that India is well insulated and not under the grip of recession. 

3. However, Realizing the gravity of the situation, the GOI has taken swift action to infuse employment generation and negate the impact of economic slow down, as far as possible. In pursuit of the goal, steps have been taken in an earnest manner by various Ministries and its sub ordinate Offices for recruitment of the existing backlog vacancies and the response from the job seekers is also tremendous. It is felt that in the given situation, the proposal to rise the retirement age for whatever reasons will only jeopardize the scheme of employment generation. The obvious reasons for this line of thought may be that the deferment in superannuation will help the Government to divert the resultant resource for better utilization in other pressing and urgent areas such as drought, impending food scarcity, etc. Of late, the pension disbursement is an area of concern due to the massive allocation of fund required and the Government has started debating on various ways and means on how to find a solution and gradually get rid of burden of the mammoth pension liability on the exchequer, in a phased manner. This culminated in the introduction of new Contributory Pension Scheme for all the newly recruited Government employees during 2004.

4. In this back drop, the proposal to rise the retirement age by 2 years is nothing but postponement of the liability and it will only defeat the very purpose of job generation, which is the need of the hour. If the intention of the Government is to divert the resources to the priority and distressed areas encountering the common man such as drought and food security, the retirement age can be kept intact and only the committed retirement benefits can be considered for release in a phased manner or installments, as has been done in the past by some of the State Governments. By this way, the Government can keep alive the job aspiration as well as promotional avenues of the existing stagnated Central Government employees on the one hand and on the other, discharge the pressing demands and obligation. Further, the rise in superannuation will only pave way for exodus of the creamy layer and I am afraid that the left over will be the sediments, which will hamper the delivery mechanism, both in qualitative and quantitative terms. This cannot be allowed to happen at a time of implementation of the scintillating and visionary recommendations of the Administrative Reforms Committee which is a paradigm and going to be a trend setter for good governance and empowerment of the grass root people. 

5. It should be the endveour of the Government to eliminate/exhaust the pre Contributory Pension Fund Scheme employees as per the existing superannuation without giving extension and thereby eliminate the over burden on the pension score, as scheduled. Ideally speaking and keeping in mind the long term perspective, it will be desirable to rise the retirement age of the newly recruited employees since the introduction of the Contributory Pension Scheme to 62 or even 65 years (correspondingly, this can be made applicable to the fresh recruits/future recruits as well). By this way, the Government can retain the employees’ contribution portion to the pension fund for a longer period and the same can be better utilized according to the exigency. Alternatively, in case if the Government is so keen to utilize the expertise and the vast experience of the Employees who are at the verge of the retirement, an Optional scheme can be rolled out and the services of those willing and eligible Officers can be extended on a contractual basis for a limited period. This will also not hamper the promotional prospects as well as employment generation.