Though the IIM-Ahmedabad study for the Seventh Pay Commission (SPC) made it clear that government employees are much better paid than their private counterparts at the lower levels\u2014with guaranteed, and rising pensions, even salaries at the top level are not as bad as earlier\u2014the fact that around a crore persons were involved ensured SPC had to clear a generous hike anyway. What it did do, though, was to try and bring in some efficiency-related benchmarks, and the government has accepted these. So, SPC asked the government to withhold the annual increments of employees who didn\u2019t meet \u201cthe benchmark either for Modified Assured Career Progression (MACP) or a regular promotion within the first 20 years of their service\u201d. \u201cThere is a widespread perception\u201d, it said, \u201cthat increments as well as upward movement in the hierarchy happen as a matter of course \u2026 employees who do not meet the laid down performance criterion should not be allowed to earn future annual increments\u201d. In the event, the government has accepted SPC\u2019s recommendation that those getting a \u2018good\u2019 rank would no longer get promoted, but only those who get \u2018very good\u2019 should be considered. What the government now needs to ensure is that government employees don\u2019t start benefitting from grade-inflation\u2014over the years, as can be seen from the marks of students who pass out of school, the average marks seem to be getting higher, which is why you have near 100% marks required to get admission in most top colleges today. If, thanks to the new criterion, even ordinary government employees now get marked \u2018very good\u2019, that defeats the purpose of the SPC recommendations. Indeed, the government needs to be tightening its grading criterion and ensuring that only deserving candidates get annual promotions. It is inconceivable, for instance, that the quality of learning is getting worse in schools\u2014as can be seen from annual ASER reports\u2014if the quality of the teachers is not also going down. If the number of tax disputes and the tax cases being lost in courts is rising, similarly, it is not possible that the quality of tax personnel is rising. Some serious thought needs to be paid to grading government employees.