The Andhra Pradesh government spends 40 per cent of its revenue to pay salaries and wages to its staff. This does not include the outgo on pension and PF interest, as has been brought out by the Comptroller and Auditor General of India (CAG) in its report on the state finances in 2011-12. The expenditure is way above the 35 per cent limit fixed by the 12th Finance Commission. A noteworthy finding is that the salary bill had doubled in just four years. The state has already appointed a new pay commission to keep the employees in good humour in this election year. Once its report is implemented, the salary bill will go up further.
Andhra Pradesh is not the only state where the government has virtually become “of the employees, by the employees and for the employees”, to paraphrase Abraham Lincoln’s famous definition of democracy. The situation in other states is not very different. For Andhra Chief Minister N. Kiran Kumar Reddy, nothing matters more than winning elections and he thinks one way of doing so is pleasing the state employees. What he does not realise is that after paying the staff, the government will be left with no money to fulfill the party’s own electoral promises.
States are reluctant to raise resources because resource mobilisation by way of taxes is bound to hit some sections. Ideally, they would like to have the cake and eat it too. Government employees are a very powerful, organised group, which, every political party thinks, can make or mar its fortunes in elections. That is why, irrespective of which party is in power, the government employees’ demands are always met. As a result, the states are increasingly becoming debt-ridden. Good governance means spending money frugally so that every paisa is spent for the common good of the people. But, then, who bothers about such noble concepts?