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Contracting out jobs – welcome move by TN government

For long IE has been pointing to the unsustainability of the burgeoning outgo on the salaries and pensions, subsidies and grants and debt servicing costs incurred by the Tamil Nadu government. Combining these with the mounting losses of state-run corporations – power, transport… the state has to borrow for balancing its budget. The result is a continuous and steep increase in public debt; this in turn means more outgo on interest and repayment of part of the debt.
The state leadership has been caught in a strait-jacket: inability to curtail populist schemes that have been the bedrock of election platforms of the Dravidian parties for over 50 years; the reluctance to adjust pricing/tariff for public services on fears of consumer resistance and the difficulty in containing to limits the wage and pension expenditure of government employees.
Employee costs, including pensions, account for around 50 per cent of revenue receipts; subsidies, grants and other freebies take away nearly 35 per cent of revenue and debt servicing drains around 18 per cent. Thus these three items alone take more than total revenue receipts compelling fresh borrowings for meeting other essential expenditure.
Despite an efficient tax collection machinery, sluggish economic growth in recent years has also been impacting growth in revenue receipts.
In this background the recent plan to look at outsourcing jobs through the appointment of contract workers is a necessary major step.
IE has also been pointing to the profligacy of successive governments, particularly DMK under Karunanidhi, in expanding employment under the government which presently exceeds ten lakh. There is also an estimated 3 lakh jobs under government that have not been filled. This is much larger than employees under the government in much larger states like UP, Bihar or Maharashtra with much higher population.
Finance Secretary K Shanmugam has taken bold to caution the government on the impossibility of continuing with the status quo. The government should move towards the next logical step of undoing some of this past profligate decisions like bringing teachers of aided colleges and other educational institutions under the government payroll. I have been pointing to the absurdity of government paying the salaries of teachers of such well-endowed institutions like the Ethiraj College, Loyola College or Madras Christian College. It should take bold to transfer the administration of government and municipality-run schools to the panchayats and other local administrations. This will improve accountability of the teachers, eliminate corruption involved in appointments and transfers and reduce the burden of administration at the state capital.

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