The central government workforce, excluding the central public sector enterprises (CPSEs), is projected to decline by nearly 50,000 employees by March 2025, according to the latest Interim Budget documents. The overall expenditure on pay and allowances, however, is expected to increase by 6.9 per cent to Rs 3.2 trillion in the financial year 2024-25.
Reasons for the decline
The Interim Budget documents for FY25 show central government employee strength is estimated to peak in 2024 at 3.51 million, growing 12 per cent over the preceding year. The 1.4 per cent decline projected for 2025 is driven by a 5.6 per cent (72,000) dip in the strength of the railway employees to 1.2 million by next year. Other key central government establishments such as police, posts, and defence (civil) are estimated to see a marginal increase in workforce by March 1 next year.
The decline in the railway workforce may be attributed to various factors such as automation, outsourcing, rationalisation and voluntary retirement schemes. The railway ministry had announced in January 2024 that it would offer voluntary retirement to its employees who have completed 20 years of service or attained 55 years of age. The ministry had also said that it would outsource some non-core activities such as catering, cleaning and security to private players.
Impact of the decline
The reduction in the central government workforce may have implications for the delivery of public services, especially in sectors such as railways, health and education. The trade unions have opposed the move and demanded that the vacancies be filled up through regular recruitment. They have also raised concerns about the impact of outsourcing on the quality and safety of services.
The government, on the other hand, has argued that the decline in the workforce is part of its efforts to improve efficiency and productivity in the public sector. The government has also claimed that it is taking steps to ensure adequate representation of reserved categories in the central government jobs. In a reply in the Rajya Sabha in December 2023, Minister of State in the Ministry of Personnel, Public Grievances and Pensions, Jitendra Singh, said that instructions were issued to all ministries/departments of the central government to constitute an in-house committee for identification of backlog reserved vacancies, to study the root cause of such vacancies, to initiate measures to remove the factors causing such vacancies and to fill them up through special recruitment drives.
Comparison with other countries
The decline in the central government workforce in India is in contrast with some other countries that have increased their public sector employment in recent years. For instance, the United States Department of Defense has increased its civilian workforce by 15 per cent since 2010, adding over 100,000 federal jobs. The increase was driven by factors such as rising military operations, cybersecurity threats and acquisition reforms.
However, some countries have also followed a similar path as India and reduced their public sector employment. For example, the United Kingdom has cut its civil service workforce by 26 per cent since 2010, eliminating over 150,000 jobs. The reduction was part of the government’s austerity measures to reduce public spending and debt.
Conclusion
The central government workforce in India is likely to witness a significant decline by March 2025, mainly due to the reduction in the railway employees. The move may have implications for the delivery of public services and the representation of reserved categories in the government jobs. The government has justified the move as a way to improve efficiency and productivity in the public sector. The trend of workforce reduction in India is different from some other countries that have increased their public sector employment, while similar to some others that have reduced it.