Central govt staff count likely to decline by nearly 50,000 in 2025

While the central government workforce in India excluding CPSEs is poised to peak in 2024 at 3.51 million, it is projected to shrink by approximately 50,000 employees by March 2025, according to the latest Interim Budget documents. This 1.4% decline follows a significant 12% growth in 2024.

Intriguingly, despite the employee reduction, the overall expenditure on pay and allowances is expected to increase by 6.9% to Rs 3.2 trillion in the financial year 2024-25. This suggests rising payroll costs per employee, potentially due to factors like promotions, salary revisions, or increased benefits.

Key observations from the budget documents:

• Peak workforce in 2024: The central government workforce excluding CPSEs is expected to reach its peak of 3.51 million in 2024, representing a 12% increase from the previous year.
• Projected decline in 2025: The workforce is projected to shrink by 1.4% in 2025, with a net loss of approximately 50,000 employees.
• Spending increase despite workforce reduction: The overall expenditure on pay and allowances is expected to rise by 6.9% to Rs 3.2 trillion in 2024-25, despite the employee reduction.

Possible explanations for the trends:

• Retirement and attrition: A significant number of employees might be nearing retirement age, leading to natural attrition.
• Government initiatives: Recent government initiatives focused on streamlining and optimizing public services could be leading to workforce reductions in certain departments.
• Increased pay and benefits: The rise in payroll costs per employee could be attributed to factors like promotions, salary revisions, or increased benefits.