Government Wages and Market Rates

Ajay Shah analyses the government wages and compares them with the prevalent market rates in Revising the wages of civil servants. The bottomline is captured below.

The main story is simultaneously that while GOI employees at the top are incredibly underpaid - by market standards - the bulk of GOI employees (roughly 98% of them) are incredibly overpaid by market standards. Example: the full cost of a driver at the Ministry of Finance was estimated by me to be four times bigger than the cost of an unorganised sector driver. Not 4% higher, not 40% higher, but four times higher.

Cross-posted on the Indian Economy blog.