Civil Services Reforms : Employment, Pay and the Evolution of Civil Services

The Civil Services Reform is a very deliberate action to improve the efficiency, effectiveness, professionalism, representational and democratic character of civil services, to promote the better delivery of public goods and services, with the increased accountability.

Such kinds of actions can include data gathering and analysis, organizational restructuring, improving human resource management and training, enhancing pay and benefits while assuring sustainability under overall fiscal constraints, and strengthening measures for performance management, public participation, transparency, and combating corruption.

The academic literature on civil services reform has provided arguments and counterarguments clarifying how several approaches to reform affect the overall performance of the civil service. The increasing availability of empirical data allows testing the effectiveness of the specific reforms in a given context.

While designing the effective civil service reforms is a tremendously complex task considering that the right mix of corruption control and performance improvements may vary considerably across and within countries, empirical as well as qualitative research can contribute to the body of evidence-based knowledge on civil service reforms in developing countries.

There have been several studies and research with articles in the past on civil services reforms. Before Independence, there was the Royal Commission on Public Service in India, popularly known as the Islington Commission (1912-15) and the Royal Commission on Superior Civil Service in India, commonly known as the Lee Commission (1923-24).

After Independence, the relevant committees on civil service reforms included the Secretariat Re-Organization Committee under the chairmanship of Sir Girljashankar Vajpayee (1947); the Committee on Re-organization of Government of India headed by Mr. Shri GopalaswamI Aiyangar, the Report on Public Administration (1951) by Shri A.D.

The Commission on Administrative Reforms marked an essential chapter in the field of civil services reforms, apart from these. The Central Pay Commissions have also made some useful recommendations, the last Pay Commission being the Fifth Central Pay Commission (1997).

Mention may also be made of the Expenditure Reforms Commission (2001) under the chairmanship of Mr. Shri K.P. Geethakrishnan and the National Commission to Review the Working of the Constitution headed by Justice m‘.N. Venkatachaliah- Former Chief Justice of India. The Cabinet Secretariat has also initiated some studies in recent years on civil service reforms and also set up committees of senior civil servants to consider improvements in governance.

The Commission also observed that “it is this class of administrative entrepreneurs — clean, honest and performance-oriented — who should emerge on the Indian scene to do the civil services command with the respect of all sections of society”.

Its recommendations is broadly to cover:

  • The integrity in public service and the removal from service of corrupt officials.
  • the need for public-friendly administration.
  • constitution of a high-level panel comprising Comptroller & Auditor General, Central Vigilance Commissioner and the Cabinet Secretary to ensure clean and accountable Govt; and
  • formulation of a policy of transfer for civil servants.

Employment and Pay Reforms (Bureaucracy in India)

During the 1980s, developing countries subject to the structural adjustment programs (SAPs) experienced fiscal austerity, notably manifested through pressures to reduce the public wage bill.  R. Klitgaard raised the concerns that falling civil service wages could exacerbate bureaucratic inefficiencies and corruption.

Low public sector wages have also been associated with lower performance and motivation. Salaries below the opportunity cost can induce the civil servants to opt for potentially harmful and adaptive strategies and to seek opportunities for own-account activities. The public officials may ask for compensation through informal or illegal means, and these coping strategies can compromise the efficiency and honesty of civil services organizations.

Considering these arguments, increasing public officials’ wages and other employment benefits has been an essential aspect of the civil service reform agenda in developing countries. The economic models based on the early work of Becker and Stigler have had a particular influence or effect on the policies of debate.

Principal-agent models of corruption in civil services provide a theoretical analysis of the relationship between the public service pay and crime. The shirking model (Shapiro-Stieglitz) is centred on the choice of public officials who have the opportunity to be corrupt must make this choice.

These rational utility-maximizing agents decide to engage in the morally hazardous behaviour based on a cost-benefit analysis equating the expected returns to corruption (bribes) to the costs of being corrupt (penalties, potential foregone future earnings). Fraud is detected with a certain probability and is punished by job loss or other sanctions.

The model predicts that all else equal, higher wages can deter corruption by increasing the value of behaving honestly. However, when bribes are high and everywhere, and the punishment and probability of detection are low, substantial increases in public official’s wages may be required to pre-empt bribery.

Another model explains the bureaucratic corruption, the fair-wage model, makes a distinction between the need-based and the greed-based fraud. According to this theory, public officials are not necessarily driven by greed. Still, they usually find corruption tempting when their salaries do not allow to meet subsistence levels or fulfil their basic needs.

‘Fairness’ is also determined by various other factors, such as – the salaries of peers within the civil service, private sector wages, social expectations and the status of civil servants. The perception and knowledge of not being able to get paid a fair salary usually increase the corruptibility and also reduces the moral costs of corruption.

This model, therefore, suggests that even the modest increases in wages, ensuring ‘fair wages’ can reduce civil servants’ propensity to solicit and accept bribes.

Evolution of Civil Services in India

  • Ancient time: Kautilya’s Arthashastra stipulates seven essential elements – Swamin (the ruler), Amatya (the bureaucracy), Janapada (territory), Durga (the fortified capital), Kosa (the treasury), Danda (the army), and Mitra (the ally) – of the administrative apparatus.
  • According to Arthashastra, the higher bureaucracy consisted of the mantrins and the amatyas. While the mantrins were the most senior advisors to the King, the amatyas were the civil servants.
  • Medieval period: During the Mughal era, the bureaucracy was based on the mansabdari system.
  • The mansabdari system was mostly a pool of civil servants available for civil or military deployment.
  • During British India: The significant changes in the civil services in British India came with the implementation of Macaulay’s Report 1835.
  • The Macaulay Report recommended that only the best and brightest would do for the Indian Civil Service, to serve the interest of the British empire.
  • Post-Independence: After Independence, the Indian civil services system retained the elements of the British structure like a unified administrative system such as an open-entry system based on academic achievements, permanency of tenure.


Civil Services Reform in India is a problematic exercise considering the great diversity of our population, the language, culture, the infrastructure, and the institutions of governance. 

The Civil Services reforms must also consider the constitutional provisions governing the distribution of powers between the Union, the States and the institutions of local government.

Areas covered in this article

  • Civil services reforms overview
  • Employment and reforms
  • Evolution of Civil Services in India

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