How my salary has grown over the years

With the government having approved the 7th pay commission pay hike for government employees, there is a furore and anger that the hike is not large enough. As with each pay commission, non-government employees grumble about how the govt servant is overpaid and not accountable enough.

Next month I complete 10 years of contiguous govt employment. I thought this might a good time to look back on how my salary has grown over the years for some perspective.

Some caveats: My pay scale that is not identical to the typical govt scale. It is a touch higher. However, the DA rates and increments are the same as all.

In this post, I am only listing the annulized increase in Basic+DA. My understanding is that these should be identical or at least close to the corresponding values for other cadres.

Annualized Increase in basic+DA:

5.03% -->July 2008 to  Oct 2009

Next month, Nov 2009 Basic+DA increased by 2.786 times due to the 6th Pay commission. My basic alone went by 3.29 times. Now the proposed hike in basic is only 2.57.

13.17% --> Nov 2009 to Sep 2012. This is the high inflation period and the bi-annual DAs were pretty steep!

In Oct 2012 I moved to the next scale due to a promotion and my salary increased by, hold on to your seats, an incredible 1.084 times!!

In other words, not much happened!

11.00% --> Oct 2012 to Dec 2015.

When inflation spiked, the salaries kept reasonable pace too. This is a fact and these percentages are nothing to complain about.

28.27% --> Jul 2008 to Dec 2015 (this includes one pay commission and one promotion- which amounts to not much). I double checked that number thrice(!) and still cannot believe it. This will not be same for all as the 6th PC hike was not uniform (if I recall right).

Sound great, but this is not wealth to rejoice as I have expenses all the time. So I won't that number too seriously.

So why are government employees unhappy?

The actual quantum of salary received at the time of joining is the problem. A mid- or lower-cadre employee joining today would get a decent salary. I think there is no dispute there (from current employees. New guys may still crib relatively!).

However, for someone who joined in the 1990s (when India had teething money problems) or even in 2000s (economy was booming), the starting pay was quite small. Meaning they were just about able to make ends meet.

The high DAs were good but not enough because the basic itself was small. The government employee and his family members were suddenly drawn into a consumeristic culture where there was a compulsion to 'keep up with the Joneses'.

Given the way Indians took to IT like a fish to water, chances are that one or even both Joneses were IT employees earning much more (and consuming close to that).

So the benchmark of a 'good standard of living' has gradually changed in India, with a sharp fork after the tech boom, separating govt and corp employee.

Consciously or subconsciously, the govt employee started comparing his salary and lifestyle with that of the corporate employee. Perhaps they always did, but the difference was stark now and ease with which people joined the IT industry probably rubbed salt into the wound.

Since the starting pay was small, subsequent pay commissions and promotions (if any!) were not enough to take the life of the government employee to the 'next level'. They were just about enough to be a bit more comfortable at the same spot.

There is no way out of this! We will have to recognise that corporate employees are paid from profits and government employees are paid from revenue (arguably from borrowings, since our fiscal deficit is negative for most of the time).

Only if the government employee had the foresight to invest right and invest as much as possible and was lucky enough to actually do so, their net worth would have outperformed the percentages mentioned above. This is crucial because of shockers like this:

As mentioned above, the hike in basic in the 6th PC (for me) was 3.3 times. This time, it would be ~ 2.57 times.

If you compare 3.3 and 2.57, the hike is approximately 22% less!

Multiplying a 5000 basic with 2.57 and multiplying a 50,000 basic with 2.57 is mathematically the same, but not practically or psychologically!

For someone with a good current salary, this will not hurt much. For someone who is already having trouble managing expenses and EMI, this hike will hurt because they will have to wait another 10 years and who knows how much the quantum would be then!

This 10-year wait is the key problem. The increment +DA hikes (twice a year) are not the issue. The hike in total salary should be close to or even a touch higher than inflation. That is cold comfort for those who do not make enough.

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28 thoughts on “How my salary has grown over the years

  1. Kishan

    The percentages seem to be annualized. But how is the lower percentages in 10s and, the final one in 20s. Didn't understand actually.

    1. freefincal

      They are annualised. If you notice the durations, they are segmented. That is the reason for the big difference.

  2. Sreekanth

    The cry on IT sector salaries should and must end! In a service based company, an IT employee makes 1 year salary to the company in terms of revenue with his work in relatively JUST 2 months. Comparing this with govt jobs or as a matter of fact any other vertical is like comparing Oranges to Apple. Why not compare with the salaries of CxO? That would make the difference even high compared to IT salaries. It is well known fact that IT sector in India has high disparity in terms of wages compared to most countries doing same job. Even if you want to compare, the IT sector employees are getting less compared to govt employees who also get post retiral benefits. An IT employee gets even lesser hike than the CPI annually. The contribution of IT employees for their company is too high that they get in return peanuts! Do I need to remind that the net profit of TCS alone per year is Rs. 24,000 crore?
    If an IT employee is working on BPO service then his starting pay is anywhere between 10K-18K most ranging at 12-15k. Do I need to remind that a peon salary ranges from Rs. 10,000 to 18k? Compare Oranges with Oranges not with Apples.

    1. freefincal

      To compare apples vs oranges is human. The comparison is not the reason for asking for higher pay.

  3. avinash

    Govt employes unbeleivbly inefficient and end work at 4:30. PM .Has any givt employee worked overnight ? Govt employes get hikes in a timebound manner irrespective of efficiency and perormance.WOW!!!

  4. Rrockstar

    Are the Non-Government Employees feel jealous of the Government Employees or do they have any personal vengeance? Why do they use such angry words? Dont the IT/Private Employees realize that they have chosen their non-Govt career by themselves! And more over in longer run, Govt Employees are always behind in terms of Salary and Benefits.

  5. Pradeep

    The general public will not approve of any pay commission hikes to govt employees unless the corruption is eradicated in the govt offices. But the central govt employees include armed forces, university employees, etc who have no scope for corruption. So in a way the hikes are justified for them.
    As for those employees unhappy with the hikes, they must realize that their hikes are very much higher as compared to 90% private employees in the country. There are many private employees who don't even get an annual hike. IT is a special case.
    Add to it the retirement benefits they have no reason to crib.

    But the state govt offices where corruption and bribery amounts the employees get is more than the salary are the real undeserved hikes, can a common man stop corruption? No
    Will the hikes stop? No
    Thats Indian democracy, utterly useless yet we are supposed to be proud.

  6. sundar

    You mean 28% hike every year from 2008 till 2016? If that is correct, that is WOW, unbelievable. Don't count me wrong, ie one awful lot for almost 80% (if not more) of inefficient arrogant plus getting into all sorts corruption government employees. And top it off, they get pension and that too increased periodically. And top it all, no accountability. Comparing these people to IT is totally irrelevant. IT or any corporate employee make profit for the company, if one stops to contribute to the kitty, they will be fired within 6 months. I have seen very efficient and helpful goverment employees, but most are not falling into that category. Why can't they compare with other private employees who work 12/14 hours a day who gets 1/10th of the goverment employee salary and work more efficiently?

    1. freefincal

      When someone says they have got a return 15% from equity, does it mean they have got that return for each year invested?

  7. Sreekanth

    Exactly why I mentioned that you should compare your salary with a CEO that would make your salary even lesser, right? Why to stop just with some unknown IT employees? Compare your salary with Infosys CEO Vishal Sikka or TCS CEO, Chandra Sekharan or even Microsoft CEO Satya Nadella or Google CEO Sundar Pichhai! At least, you have agreed honestly that you are comparing Apples with Oranges!

  8. PABande

    How much Income Tax is being paid by Govt Employee Vs Private Sector Employee as compared to their CTC ?

  9. PABande

    In Private Sector you even don't know the salary of your next desk colleague ( its confidential ) and you people talk about transparency in work . Who are responsible for lobbying and corruption in government , its private sector only.. If all private sector and individual decide not to pay single penny how corruption will proceed?

  10. PABande

    BTW Mr Sreekant if you are able to give me level wise salaries + F16 of any of- Infosys/tcs/reliance/TataMotors / HDFC Banks etc- then let us compare apples with apples...:))

  11. PABande

    All levels From Entry Level ( if possible give diff. betn person joining from avg. college and frm IIT /IIM) to CEO, perks and taxable income ! And then let me know to which Apples shall we compare Apple from Govt. ..:)).. You know as an Indian we have inherent problem finding faults in system which we cannot change. Is private sector ready to come under RTI? Can private sector start reservations ? Will private sector be able to provide work-life balance to their employee? Is Indian private sector ready to spend on research? Why Pattu prefer public sector companies for health insurance to private sector ?

  12. Shailesh Agarwal

    This guy making Indian fools. Assuming 100000 per annum is starting salary.

    Here is how is the calculation goes out.

    100000 - 106448 (5.03% ---> July 2008 to Oct 2009)

    106448 - 155309 (13.17% --> Nov 2009 to Sep 2012)

    155309 - 220984 (11.00% --> Oct 2012 to Dec 2015)

    That's overall 120.9% increase over the period of 7.5 Years (Jul 2008 to Dec 2015).

    It's annual 10.71% hike over the past 7.5 years without any performance appraisal and accountability and on top of that fixed working hours from 10am - 5PM.

    So many other Benefits like pension, da every 6 months, gratuity and lots of leaves is plus.

    Here i am not taking the account of money under the table because not all govt employees do that.

  13. Pradeep

    Let me explain how bribery works.
    Assume a govt wins elections and takes office. All elected MLAs spend crores of rupees to win elections despite Election Commission rule that you should not spend more than 27 Lacs.
    Now the MLA 's salary will not help him earn back that money (and more). Also he needs to contribute money to his party to keep himself relevant in the party.
    So he will demand his constituency councillors, etc to bring money.
    Councillors will in turn push govt officers in Panchayat office that approves construction work, Register office, RTOs, etc to contribute mandatorily by them demanding bribe for each of their signatures in documents of public.

    If you go to govt office, no work gets done without bribe, this practice has been existing for years now that you cant change it. If you dont pay up, your document will be put under the seat to lie there for months. Our people are not united to protest against this.
    Private businesses are more bothered about getting work done rather than fight these people. And they are not very ethical either.

    You cannot abolish bribery and corruption, India shall never be corruption-free. period.

  14. Anon

    @ Shailesh: My salary increased to 10x in last 10 year and I am working in IT sector. Given this, I don't see why we should be jealous about this. In IT, almost each jump in a year will fetch you 20-30% hike.

  15. jaideep

    I will not get into the debate of what my feelings are about the reward versus performance equation for the government servants. The potholes on the roads, the lousy infrastructure and the sheer arrogance and corruption in the government is there for any citizen to see. What irritates me further is this "conflict of interest" argument which distributors like me are made to hear from these same babus all the time. Pay Commissions consist almost entirely of government servants, the very ones to benefit from their awards, not lay citizens who pay the bill, but there is apparently no conflict of interest here. Recommendations of these commissions to downsize government have been dumped into the dustbin by these same babus, I suppose "in the public interest" ! And these same government servants who are protected from inflation and their own incompetence tell distributors, who have no fixed income, DA, pension or any other benefit, but pay as citizens for Pay Commission benefits, that the distributors are earning too much ! This is just my opinion, nothing personal against Pattu.


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