India spends 8% of GDP on salaries of government employees

India spends a whopping Rs 10.18 trillion on the emoluments of government employees, both at the centre and in states, a staggering 8.15% of the country's GDP.

Taken against the backdrop of spending on education, health and defence, the figures show a large chunk of government budget goes into the salaries, pensions and allowances of government employees, leaving a trickle for social sector and development activities.

A note submitted by the Department of Personnel and Training (DoPT) to a parliamentary panel highlighted the fact that out of the total GDP of India amounting to 124.88 trillion, Rs 10.18 trillion is spent on paying salaries, etc.

The Committee on Estimates chaired by veteran BJP leader Dr Murli Manohar Joshi, while reviewing the performance of all India services, found that a huge expenditure was met on wages, besides the expenditure on building infrastructure like offices and houses for bureaucracy, rather on delivery.

The panel had actually asked the government to furnish details of total expenditure incurred on Indian Administrative Service (IAS) , Indian Police Service (IPS) and Indian Forest Service (IFS) officers posted at the Centre and in states and its share in the GDP. But the government while circumventing the request submitted an overall data related to all government employees without specifying services.

The government in its presentation stated that there was no study at hand to suggest expenditures incurred on officers belonging to superior services. Taking exception to the fact that there was mechanism to find out the expenditure and its share in the GDP, the panel agreed that bureaucracy was fully committed to citizens and reflects hopes and aspirations, but said it should be held accountable for accomplishments, when it is being paid from the exchequer.

According to figures, the salaries of 10 million central government employees account for 12.6% of the central government's total expenditure. The government recently accepted the recommendations of the 7th Pay Commission, doubling the minimum starting salary from the current Rs 7,000 per month to Rs 18,000 per month. The Commission's recommendations added an extra 0.7% burden on the GDP and a yearly burden of 102,000 crore.

The government also admitted that payment of salaries, wages and other allowances to government employees is the main element of Gross value added (GVA) — the total output and measure of the value of goods and services.