Rewarding non-performers

Our leaders are pledging the present and future of our youth to grab the votes of our society’s worst-performing minority — government employees. The poll promise of the return of the fully government-funded Old Pension Scheme (OPS) in two states of our region is the most regressive idea conjured up yet by power-hungry politicians, for it will punish the hardworking millions in the private sector. The beneficiaries of this opportunistic vote-buying ploy are a few, and let us take an anecdotal peek into the performance of the potential recipients of this political largesse.

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The governments of four states are asking the society comprising primarily of private sector employees to fund a negligible minority’s old age when the population as a whole has no social security net.

Scenario 1: Someone wants to sell a piece of property somewhere in Punjab, which entails seeking a No Objection Certificate (NOC) from the local estate office. The NOC is crucial as the seller’s plans of conducting the transaction and then pursuing an alternative time-bound investment depend entirely on this piece of document. So, the puny but contextually all-powerful clerk gives a date two months hence for the delivery of the NOC. Obviously, the seller cannot wait two months as the buyer could well find an alternative property by then, derailing the seller’s investment plans as well. So, the seller asks the all-powerful clerk for a way out — which turns out to be a bribe of Rs 35,000.

In the changed circumstances of the new, zero-corruption system, the estate office clerk does not take the bribe directly from the seller. Instead, he or she has perfected a new, foolproof method. The seller hands over Rs 35,000 to the ubiquitous property broker, who in turn gives it to the clerk. The deal is done. The document is delivered in 24 hours. If the employee-funded New Pension Scheme (NPS) is rolled back and the government-funded OPS is brought in, this clerk will be getting a monthly pension (fully subsidised by the government dipping its hands into the pockets of taxpayers) as long as he/she is alive. There will be regular increments, festival bonuses and arrears, which will continue even after death for the spouse.

Scenario 2: Another taxpayer chooses to build a house in one of Punjab’s districts. The architect’s drawings are submitted to get the building plan cleared by a Junior Engineer. Prompt comes the reply: wait for a couple of months or pay ‘speed money’ of

Rs 10,000, to be delivered not directly but by the architect’s messenger. Money is paid and the permission comes signed and sealed within 24 hours. After retirement, the JE would hope to get a pension higher than what he earned as salary but, of course, much less than what he got as bribes. Can’t blame cynics who wonder whether politicians would device a scheme to protect bribe earnings as well!

Scenario 3: A house-builder is at the Punjab State Power Corporation Ltd office, where he goes begging for an electricity connection. The modus operandi is the same: no direct contact between the bribe-giver and the recipient. Touts are sitting in various shops outside the PSPCL office. The bribe here is around Rs 5,000 and even the tout will not take it directly from the house-builder; it has to be given by the building contractor to the tout. But the efficiency has to be admired. The meter is installed in no time. Similar are the ways of clearing other governmental hurdles — for house registration, water, sewerage connection, etc.

Sure, the rates may vary according to the location — the Ludhiana and Mohali rates may not be that of Jalandhar, Patiala or Amritsar. So, all hapless, honest taxpayers who plan to fund the OPS are requested to check with the local touts for the latest rates in their respective districts. The situation is the same in Himachal Pradesh (and can only be worse in Rajasthan and Chhattisgarh). Punjab has a population of about 2.9 crore people, who would be forced to fund 1.75 lakh beneficiaries of the poll promise. Himachal’s population is only 70 lakh and the beneficiaries are 1.16 lakh. That indirect taxes in the form of GST, squeezed from all those honest youngsters working in wayside dhabas or the contract staff mopping and cleaning Himachal’s hotels, would be spent on the revised OPS is a cruel thought.

New India cannot afford the old scheme. The private sector is the engine of India’s growth; it employs the greatest number of people in the country who have no protection from the vagaries of the workplace. Perform or perish is their credo and there are no political masters to protect them from chargesheets, inquiries or penalties. Wrongdoers seldom have a second chance. The governments of four states are asking the society comprising primarily of these private sector employees to fund a negligible minority’s old age when the state’s population as a whole has no social security net. When they fall, their backs are broken for the rest of their lives.

All that NPS requires is a tweaking, with the savings instrument of the Provident Fund added to it. Also, our politicos in these four states can consider an innovative idea of NPS for the private sector, which will fetch them far greater votes than the return of the OPS ever can. Apart from the Provident Fund, there could be an NPS account for all private sector employees, on the lines of the NPS for government employees. Even if the employers are not burdened with additional contribution for the NPS (because the private sector employers are already contributing to the PF account), the employees can create a safety net for themselves.

But to bring back the OPS is to pit the honest and angry private sector employee against some of the corrupt and contented clerks. The message about the damage this can do to the economy and the future tax accruals has still not gone down to the masses, who are primarily employed in the private sector. When the message does reach them, it will prove very costly for those politicos who stand with the non-performing minuscule minority.