Salaries of government employees substantially hiked
Thu, Aug 14 04:00 PM
New Delhi, Aug 14 (IANS) The central government Thursday revised the recommendations of the Sixth Pay Commission to grant substantial hikes to its five million employees, with special attention being paid to military and paramilitary personnel.
'The cabinet has broadly accepted the recommendations of the Sixth Pay Commission with some modifications in the wake of representations received from various sections and associations of central government employees,' Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a cabinet meeting chaired by Prime Minister Manmohan Singh.
The revision translates into a 20 percent hike over the 40 percent across-the-board hike the pay commission had recommended.
The revision will enlarge the government's wage bill by Rs.221 billion in the current fiscal that ends March 31, 2009, Dasmunsi said.
The prime minister would announce more details Friday during his address from the ramparts of the Red fort on Independence Day, he added.
The minimum basic pay for a central government employee would now be Rs.7,000 a month, which will translate to around Rs.10,000 after adding allowances, the minister said.
As for arrears, central government employees would get 40 percent in the current fiscal and 60 percent in fiscal 2009-10, Dasmunsi said.
The revised scales would be retroactive Jan 1, 2006 and would be payable from Sep 1, 2008, the minister said.
The other highlights of the cabinet decision are:
* Enhancement in the fitment in revised pay bands recommended by the pay commission to be based on multiplication factor of 1.74 to 1.86 to result in increased emoluments for government employees;
* Increase in the annual increment rate from 2.5 percent to 3 percent;
* At least three promotions assured for defence personnel and civilian employees under modified assured career progression (ACP) scheme. Civilians will be assured of promotions after 10, 20 and 30 years of service while junior and non-commissioned officers and personnel below officer rank (PBOR) would be eligible for this after 8, 16 and 24 years of service.
* Military Service Pay enhanced from Rs.1,000 to Rs.2,000 for PBORs. MSP retained at Rs.6,000 for officers up to brigadier's rank;
* Middle level officers - colonels, brigadiers and equivalent - placed in the highest pay band of PB-4.
* Lieutenant generals overlooked for promotion as army commanders due to lack of residual service would now get the grade of Army Commander.
The report of the Sixth Pay Commission, headed by Justice (retd) B.N. Srikrishna, was submitted to Finance Minister P. Chidambaram here March 24.
It immediately raised a storm of protests from both civilian and defence personnel, following which the government had appointed a committee under cabinet secretary K. Chandrashekhar to study the representations received.
The three service chiefs, on their part had made a joint representation to Defence Minister A.K. Antony saying their expectations had not been met. On Wednesday, the prime minister had chaired a high-level meeting to consider the Chandrashekhar committee's recommendations with regard to the armed forces.
Thereafter, official sources said, finance ministry bureaucrats had burned the midnight oil to ready the revised package for both civilians and defence personnel and finished the task only by 5 a.m. Thursday.
Thursday, August 14, 2008
GOVT APPROVES VI PAY REPORT
August 14, 2008 13:02 ISTLast Updated: August 14, 2008 13:13 IST
The government on Thursday approved the Sixth Pay Commission recommendations, heaping civil and defence staff with a salary hike bonanza on the eve of the country's 61st Independence Day.
The Sixth Pay Commission, which was headed by Justice B N Srikrishna, had in March submitted its report to the government, recommending an average 28 per cent hike for central government staff and defence personnel.
All about the 6th Pay Commission report
Highlights:
Pay revision with effect from January 1, 2006.
Arrears to be paid in two installments -- 40 per cent this fiscal and 60 per cent in the next financial year, said Information and Broadcasting Minister P R Dasmunsi.
Minimum entry level pay raised to Rs 7,000 from Rs 6,660 per month recommended by the Commission.
Financial implication of Pay Commission on General Budget would be Rs 15,700 crore (Rs 157 billion) and Rs 6400 crore (Rs 64 billion) on the Railway Budget in 2008-09.
Average increase in pay is 21 per cent, said expenditure secretary Sushma Nath.
Prime Minister Manmohan Singh had on wednesday held a meeting with External Affairs Minister Pranab Mukherjee, Defence Minister A K Antony and Finance Minister P Chidambaram to discuss the pay commission report and the recommendations of the empowered committee of Secretaries that went into it.
The government on Thursday approved the Sixth Pay Commission recommendations, heaping civil and defence staff with a salary hike bonanza on the eve of the country's 61st Independence Day.
The Sixth Pay Commission, which was headed by Justice B N Srikrishna, had in March submitted its report to the government, recommending an average 28 per cent hike for central government staff and defence personnel.
All about the 6th Pay Commission report
Highlights:
Pay revision with effect from January 1, 2006.
Arrears to be paid in two installments -- 40 per cent this fiscal and 60 per cent in the next financial year, said Information and Broadcasting Minister P R Dasmunsi.
Minimum entry level pay raised to Rs 7,000 from Rs 6,660 per month recommended by the Commission.
Financial implication of Pay Commission on General Budget would be Rs 15,700 crore (Rs 157 billion) and Rs 6400 crore (Rs 64 billion) on the Railway Budget in 2008-09.
Average increase in pay is 21 per cent, said expenditure secretary Sushma Nath.
Prime Minister Manmohan Singh had on wednesday held a meeting with External Affairs Minister Pranab Mukherjee, Defence Minister A K Antony and Finance Minister P Chidambaram to discuss the pay commission report and the recommendations of the empowered committee of Secretaries that went into it.
BONANZA FOR GOVT STAFF
Govt approves Sixth Pay Commission recommendations
August 14, 2008 13:02 ISTLast Updated: August 14, 2008 13:13 IST
The government on Thursday approved the Sixth Pay Commission recommendations, heaping civil and defence staff with a salary hike bonanza on the eve of the country's 61st Independence Day.
The Sixth Pay Commission, which was headed by Justice B N Srikrishna, had in March submitted its report to the government, recommending an average 28 per cent hike for central government staff and defence personnel
All about the 6th Pay Commission reportMarch 24, 2008
The following are the highlights of the 6th Pay Commission Panel report that was submitted to the government on Monday: The 18-month tenure of the Commission was till April 4, 2008.
Implementation of the revised pay scales from January 1, 2006. Recommendations relating to allowances to be implemented prospectively.
To remove stagnation, introduction of running pay bands for all posts in the Government presently existing in scales below that of Rs 26,000 (fixed).
Four distinct running pay bands being recommended -- one running band each for all categories of employees in groups 'B' and 'C' with 2 running pay bands for Group A posts.
The posts of Secretary to Government of India/equivalent and Cabinet Secretary/equivalent to be kept in distinct pay scales.
A separate running pay band, designated as -1S scale, is not to be counted for any purpose as no future recruitment is to be made in this grade and all the present Group D employees not possessing the prescribed qualifications are to be upgraded and placed in the Group 'C' running pay band PB-1 after they are suitably retrained. Group D employees possessing the minimum prescribed qualifications to be placed in PB-1 pay band straightaway.
Minimum salary at the entry level of PB-1 pay band to be Rs 6660 (Rs 4860 as pay in the pay band plus Rs 1800 as grade pay). Maximum salary at the level of Secretary/equivalent to be Rs 80000. The minimum: maximum ratio 1:12.
Every post, barring that of Secretary/equivalent and Cabinet Secretary/equivalent to have a distinct grade pay attached to it. Grade pay (being a fixed amount attached to each post in the hierarchy) to determine the status of a post with a senior post being given higher grade pay.
The total number of grades reduced to 20 spread across four distinct running pay bands; one Apex Scale and another grade for the post of Cabinet Secretary/equivalent as against 35 standard pay scales existing earlier.
At the time of promotion from one post to another, the grade pay attached to posts in different levels within the same running pay band to change. Additionally, increase in form of one increment to be given at the time of promotion. A person stagnating at the maximum of any pay band for more than one year continuously to be placed in the immediate next higher pay band without any change in the grade pay.
Annual increments to be paid in form of two and half percent of the total of pay in the Pay Band and the corresponding grade pay. The date of annual increments, in all cases, to be first of July. Employees completing six months and above in the scale as on July 1 to be eligible.
August 14, 2008 13:02 ISTLast Updated: August 14, 2008 13:13 IST
The government on Thursday approved the Sixth Pay Commission recommendations, heaping civil and defence staff with a salary hike bonanza on the eve of the country's 61st Independence Day.
The Sixth Pay Commission, which was headed by Justice B N Srikrishna, had in March submitted its report to the government, recommending an average 28 per cent hike for central government staff and defence personnel
All about the 6th Pay Commission reportMarch 24, 2008
The following are the highlights of the 6th Pay Commission Panel report that was submitted to the government on Monday: The 18-month tenure of the Commission was till April 4, 2008.
Implementation of the revised pay scales from January 1, 2006. Recommendations relating to allowances to be implemented prospectively.
To remove stagnation, introduction of running pay bands for all posts in the Government presently existing in scales below that of Rs 26,000 (fixed).
Four distinct running pay bands being recommended -- one running band each for all categories of employees in groups 'B' and 'C' with 2 running pay bands for Group A posts.
The posts of Secretary to Government of India/equivalent and Cabinet Secretary/equivalent to be kept in distinct pay scales.
A separate running pay band, designated as -1S scale, is not to be counted for any purpose as no future recruitment is to be made in this grade and all the present Group D employees not possessing the prescribed qualifications are to be upgraded and placed in the Group 'C' running pay band PB-1 after they are suitably retrained. Group D employees possessing the minimum prescribed qualifications to be placed in PB-1 pay band straightaway.
Minimum salary at the entry level of PB-1 pay band to be Rs 6660 (Rs 4860 as pay in the pay band plus Rs 1800 as grade pay). Maximum salary at the level of Secretary/equivalent to be Rs 80000. The minimum: maximum ratio 1:12.
Every post, barring that of Secretary/equivalent and Cabinet Secretary/equivalent to have a distinct grade pay attached to it. Grade pay (being a fixed amount attached to each post in the hierarchy) to determine the status of a post with a senior post being given higher grade pay.
The total number of grades reduced to 20 spread across four distinct running pay bands; one Apex Scale and another grade for the post of Cabinet Secretary/equivalent as against 35 standard pay scales existing earlier.
At the time of promotion from one post to another, the grade pay attached to posts in different levels within the same running pay band to change. Additionally, increase in form of one increment to be given at the time of promotion. A person stagnating at the maximum of any pay band for more than one year continuously to be placed in the immediate next higher pay band without any change in the grade pay.
Annual increments to be paid in form of two and half percent of the total of pay in the Pay Band and the corresponding grade pay. The date of annual increments, in all cases, to be first of July. Employees completing six months and above in the scale as on July 1 to be eligible.
Wednesday, August 13, 2008
Independence Day Bonanza
PROPOSAL FOR CABINET
20% raise over pay bands suggested by Pay Commission effective from Jan 2006; arrears to be paid in cash, 40% this year, the rest next year
New Delhi, August 13: A wage hike higher than those recommended by the Sixth Pay Commission, marginal increase in annual increments and the payment of arrears in cash are some of the sweeteners incorporated in the proposal for Thursday’s Cabinet meeting after Prime Minister Manmohan Singh’s intervention.
The new pay package for the 55 lakh Central government employees, to be announced on August 15, proposes a 20 per cent raise over the pay bands suggested by the Commission. The panel in May suggested a gross 40 per cent hike, which means an effective 25 per cent after taxes. “The net jump in pay would be upwards of 30 per cent with the additional increase more for lower grade staff to narrow their difference with the (pay of) senior officials,” said sources.
This raise takes into account the Commission’s miscalculation of the dearness allowance - absorbed in the new basic pay—as 74 per cent whereas it should have been 83 per cent, they said. The proposed annual increment in the basic pay would also be a tad higher than the 2.5 per cent suggested by the Commission.
The Cabinet proposal talks of a uniform 3 per cent raise every year. The current norm is a Rs 500-increase in the basic pay annually within the grade scale.
But what would be music to the bureaucrats’ ears is that the PM has shot down Finance Minister P Chidambaram’s suggestion that the new wage be effective from January 2007 instead of January 2006 because of the heavy run on this year’s Budget. Chidambaram had also wanted that the past dues be parked in the General Provident Fund to be provided as pension after retirement of the employees so that this year’s outgo from the Budget would be limited to Rs 12,500 crore.
But the PM would have none of that. He has ensured that the new pay would be effective from January 2006, as recommended by the Commission, with 40 per cent of the arrears paid in the current fiscal and the remaining 60 per cent next year.
The actual pay-out would come in November after the monsoon session of Parliament in September passes the Finance Ministry’s supplementary Demand For Grant to fund the wage bill, said sources.
What has also been shot down, though by the Committee of Secretaries, is the inclusion of heads of other services in the rank of Cabinet Secretary. The CS will remain primus inter pares, the first among equals, and that position would not be granted to the head of Intelligence Bureau, the three service chiefs or the Chairman Railway Board—as had been demanded.
There would also be no scrapping of Group D personnel (peons in ministries and coolies in Indian Railways). The Commission had suggested that these posts be subsumed in Group C of clerks, fresh induction be stopped and jobs be outsourced.
As for the armed forces, the good news is that military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month. The forces had demanded Rs 3,000 as against Rs 1,000 introduced by the commission.
There would also be a significant improvement in the salaries of Brigadiers as the government has agreed to put them in Pay Band 4 (Rs 39,200-67,000) as against the suggested pay band 3 (Rs 15,600 - 39,100).
For the Indian Police Service and Indian Forest Service, relief would come in the form of abolition of the Deputy Inspector General scale. There would also be no discrimination between Group B and Group A service officers in the form of a differential basic pay at the time of joining, as suggested by the Commission. They would both start at the same scale, as is prevalent now, said sources.
BUREAUCRACY’S BIG HIKE
A 20 % raise over the pay bands suggested by the Commission
Uniform 3% raise in basic pay every year. The norm is a Rs 500-increase annually within grade scale
New wages to be effective from January 2006
No Cabinet Secretary rank for Intelligence Bureau chief, the three Service chiefs or the Chairman, Railway Board
Group D personnel to stay (peons in ministries and porters in Railways)
Military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month
Significant hike in salaries of Brigadiers: they move to Pay Band 4 (Rs 39,200-67,000) from the suggested Pay Band 3 (Rs 15,600-39,100)
D.I.G-scale abolished in IPS and Indian Forest Service
20% raise over pay bands suggested by Pay Commission effective from Jan 2006; arrears to be paid in cash, 40% this year, the rest next year
New Delhi, August 13: A wage hike higher than those recommended by the Sixth Pay Commission, marginal increase in annual increments and the payment of arrears in cash are some of the sweeteners incorporated in the proposal for Thursday’s Cabinet meeting after Prime Minister Manmohan Singh’s intervention.
The new pay package for the 55 lakh Central government employees, to be announced on August 15, proposes a 20 per cent raise over the pay bands suggested by the Commission. The panel in May suggested a gross 40 per cent hike, which means an effective 25 per cent after taxes. “The net jump in pay would be upwards of 30 per cent with the additional increase more for lower grade staff to narrow their difference with the (pay of) senior officials,” said sources.
This raise takes into account the Commission’s miscalculation of the dearness allowance - absorbed in the new basic pay—as 74 per cent whereas it should have been 83 per cent, they said. The proposed annual increment in the basic pay would also be a tad higher than the 2.5 per cent suggested by the Commission.
The Cabinet proposal talks of a uniform 3 per cent raise every year. The current norm is a Rs 500-increase in the basic pay annually within the grade scale.
But what would be music to the bureaucrats’ ears is that the PM has shot down Finance Minister P Chidambaram’s suggestion that the new wage be effective from January 2007 instead of January 2006 because of the heavy run on this year’s Budget. Chidambaram had also wanted that the past dues be parked in the General Provident Fund to be provided as pension after retirement of the employees so that this year’s outgo from the Budget would be limited to Rs 12,500 crore.
But the PM would have none of that. He has ensured that the new pay would be effective from January 2006, as recommended by the Commission, with 40 per cent of the arrears paid in the current fiscal and the remaining 60 per cent next year.
The actual pay-out would come in November after the monsoon session of Parliament in September passes the Finance Ministry’s supplementary Demand For Grant to fund the wage bill, said sources.
What has also been shot down, though by the Committee of Secretaries, is the inclusion of heads of other services in the rank of Cabinet Secretary. The CS will remain primus inter pares, the first among equals, and that position would not be granted to the head of Intelligence Bureau, the three service chiefs or the Chairman Railway Board—as had been demanded.
There would also be no scrapping of Group D personnel (peons in ministries and coolies in Indian Railways). The Commission had suggested that these posts be subsumed in Group C of clerks, fresh induction be stopped and jobs be outsourced.
As for the armed forces, the good news is that military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month. The forces had demanded Rs 3,000 as against Rs 1,000 introduced by the commission.
There would also be a significant improvement in the salaries of Brigadiers as the government has agreed to put them in Pay Band 4 (Rs 39,200-67,000) as against the suggested pay band 3 (Rs 15,600 - 39,100).
For the Indian Police Service and Indian Forest Service, relief would come in the form of abolition of the Deputy Inspector General scale. There would also be no discrimination between Group B and Group A service officers in the form of a differential basic pay at the time of joining, as suggested by the Commission. They would both start at the same scale, as is prevalent now, said sources.
BUREAUCRACY’S BIG HIKE
A 20 % raise over the pay bands suggested by the Commission
Uniform 3% raise in basic pay every year. The norm is a Rs 500-increase annually within grade scale
New wages to be effective from January 2006
No Cabinet Secretary rank for Intelligence Bureau chief, the three Service chiefs or the Chairman, Railway Board
Group D personnel to stay (peons in ministries and porters in Railways)
Military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month
Significant hike in salaries of Brigadiers: they move to Pay Band 4 (Rs 39,200-67,000) from the suggested Pay Band 3 (Rs 15,600-39,100)
D.I.G-scale abolished in IPS and Indian Forest Service
Monday, August 11, 2008
It’s independent India’s first individual Olympic gold medal
Abhinav Bindra with the gold medal.
Abhinav Bindra won the Olympic gold medal for the 10-metre air rifle event here on Monday, bagging for independent India its first individual Olympic gold and sending the nation into raptures.
The gold was an improvement on the silver won by another shooter, double trap marksman Rajyavardhan Singh Rathore, in the Athens Olympics.
It was also the fifth individual medal for India in Olympic Games over the years. Tennis ace Leander Paes won the singles bronze in Atlanta in 1996 and lifter Karnam Malleswari won a bronze in Sydney in 2000. K.D. Jadhav opened the account for India in 1952 with a wrestling bronze.
Indian hockey has won eight gold medals, but it has been a dream for the country to win gold elsewhere. The hockey team failed to qualify for the Beijing Games.
It was third time lucky for the 25-year-old Bindra, from Chandigarh: he missed the final by one point in Sydney. There, he was the youngest shooter in the fray.
He made it to the final last time in Athens but finished seventh: flawed flooring affected his performance.
In Beijing, Abhinav missed the last of his 60 shots before the final and was placed fourth with596 at the end of the qualification series, two points behind the leaders. He moved into the medal bracket after the first of 10 shots in the final, and moved up to the silver after the third shot. He had the gold in control after the seventh shot, and was tied for the gold with Henri Hakkinen of Finland after the penultimate shot.
While the nation waited with bated breath as the event was telecast live, Abhinav released the last shot, the first to do so among the eight finalists, for a near-perfect 10.8.
The gold having been clinched by the Indian, the Chinese defending champion and Olympic record holder, Zhu Qinan, had to settle for the silver despite an impressive 10.5 last shot.
President Pratibha Patil and Prime Minister Manmohan Singh on Monday hailed Bindra’s feat. Ms. Patil said “Bindra has realised the dream of a billion people.”
Dr. Singh said the shooter has “done the nation proud through his spectacular achievement which I hope will inspire other sportspersons of our country.”
Abhinav Bindra with the gold medal.
Abhinav Bindra won the Olympic gold medal for the 10-metre air rifle event here on Monday, bagging for independent India its first individual Olympic gold and sending the nation into raptures.
The gold was an improvement on the silver won by another shooter, double trap marksman Rajyavardhan Singh Rathore, in the Athens Olympics.
It was also the fifth individual medal for India in Olympic Games over the years. Tennis ace Leander Paes won the singles bronze in Atlanta in 1996 and lifter Karnam Malleswari won a bronze in Sydney in 2000. K.D. Jadhav opened the account for India in 1952 with a wrestling bronze.
Indian hockey has won eight gold medals, but it has been a dream for the country to win gold elsewhere. The hockey team failed to qualify for the Beijing Games.
It was third time lucky for the 25-year-old Bindra, from Chandigarh: he missed the final by one point in Sydney. There, he was the youngest shooter in the fray.
He made it to the final last time in Athens but finished seventh: flawed flooring affected his performance.
In Beijing, Abhinav missed the last of his 60 shots before the final and was placed fourth with596 at the end of the qualification series, two points behind the leaders. He moved into the medal bracket after the first of 10 shots in the final, and moved up to the silver after the third shot. He had the gold in control after the seventh shot, and was tied for the gold with Henri Hakkinen of Finland after the penultimate shot.
While the nation waited with bated breath as the event was telecast live, Abhinav released the last shot, the first to do so among the eight finalists, for a near-perfect 10.8.
The gold having been clinched by the Indian, the Chinese defending champion and Olympic record holder, Zhu Qinan, had to settle for the silver despite an impressive 10.5 last shot.
President Pratibha Patil and Prime Minister Manmohan Singh on Monday hailed Bindra’s feat. Ms. Patil said “Bindra has realised the dream of a billion people.”
Dr. Singh said the shooter has “done the nation proud through his spectacular achievement which I hope will inspire other sportspersons of our country.”
Wednesday, August 6, 2008
OIL FALLS
Oil falls to $118 a barrel, a three-month Low
Oil fell to $118 a barrel on Tuesday, a three-month low, as investors focused on rising OPEC supply and declining demand in the United States and Europe.
The loss extends a slide from the July 11 record high of $147.27 a barrel, despite a Gulf of Mexico storm that has curbed oil output, and is prompting some to say that oil's rally has run its course for now
Oil fell to $118 a barrel on Tuesday, a three-month low, as investors focused on rising OPEC supply and declining demand in the United States and Europe.
The loss extends a slide from the July 11 record high of $147.27 a barrel, despite a Gulf of Mexico storm that has curbed oil output, and is prompting some to say that oil's rally has run its course for now
Monday, August 4, 2008
VI CENTRAL PAY COMMISSION AWARDS
Pay panel awards may be deferred
August 05, 2008 03:13 IST
The government may defer the implementation of the sixth Pay Commission award by a year or even two to reduce the fiscal burden of the recommendations that proposed a 28 per cent across-the-board salary increase for an estimated 4.5 million central government employees.
The report of the commission headed by Justice BN Srikrishna was submitted to the government on March 24 this year, nearly a fortnight before its 18-month tenure was to end.
Senior government sources said that the government's current fiscal position may well see the arrear payments deferred to January 1, 2008, two years later than originally recommended. However, a relaxation may be granted to employees who have retired in the interim period.
Lower-level government staff in central government service, which comprises a large part of the employee base, may also get some relaxation, although it is not clear what it will be.
The panel had recommended implementing the revised pay scales from January 1, 2006. The new pay scales, if implemented as originally recommended, would have cost the exchequer Rs 7,975 crore in fiscal 2008-09. However, the one-time additional outgo on account of the retrospective revision of salaries is estimated to be at Rs 18,060 crore. The arrears were to be given in instalments, which would have lessened the fiscal burden.
Before the report was submitted, finance ministry officials had said the impact of the recommendations would be within 0.4 per cent of Gross Domestic Product in 2008-09. Other experts have said the impact would not exceed 0.5 per cent of GDP, unlike the previous fifth Pay Commission award when the impact was much higher.
In Budget 2008-09, the finance ministry has estimated the fiscal deficit at 2.5 per cent of GDP, which is in line with the Fiscal Responsibility and Budget Management Act, 2003. This included headroom for the likely impact of the Pay Commission award. However, subsequent developments have led to the fear that the Centre's fiscal position may have taken a beating during the year on account of the farm loan relief package and higher crude oil prices leading to an increase in the subsidy burden.
In fact, risk rating agency Moody's today forecast a deterioration of central government finances and pointed out that the central government's true borrowing need � which equals the reported fiscal deficit plus off-Budget borrowing � could reach 10 per cent of GDP, up from 8 per cent projected earlier this fiscal if global crude oil prices average $110/120 a barrel in 2008-09 and domestic retail fuel prices are not raised further.
Soon after the report was published, the defence services had opposed its recommendations on the grounds that it gave short-shrift to their demands. The matter was referred to a committee of secretaries. It is believed that the issue has been discussed and a final proposal may be put up for Cabinet consideration, officials said.
They added that a final decision could be taken as early as next month, well before six states head for elections to their legislatures. Of these, the Congress-ruled Delhi is crucial, being home to a large percentage of the country's central government employees.
August 05, 2008 03:13 IST
The government may defer the implementation of the sixth Pay Commission award by a year or even two to reduce the fiscal burden of the recommendations that proposed a 28 per cent across-the-board salary increase for an estimated 4.5 million central government employees.
The report of the commission headed by Justice BN Srikrishna was submitted to the government on March 24 this year, nearly a fortnight before its 18-month tenure was to end.
Senior government sources said that the government's current fiscal position may well see the arrear payments deferred to January 1, 2008, two years later than originally recommended. However, a relaxation may be granted to employees who have retired in the interim period.
Lower-level government staff in central government service, which comprises a large part of the employee base, may also get some relaxation, although it is not clear what it will be.
The panel had recommended implementing the revised pay scales from January 1, 2006. The new pay scales, if implemented as originally recommended, would have cost the exchequer Rs 7,975 crore in fiscal 2008-09. However, the one-time additional outgo on account of the retrospective revision of salaries is estimated to be at Rs 18,060 crore. The arrears were to be given in instalments, which would have lessened the fiscal burden.
Before the report was submitted, finance ministry officials had said the impact of the recommendations would be within 0.4 per cent of Gross Domestic Product in 2008-09. Other experts have said the impact would not exceed 0.5 per cent of GDP, unlike the previous fifth Pay Commission award when the impact was much higher.
In Budget 2008-09, the finance ministry has estimated the fiscal deficit at 2.5 per cent of GDP, which is in line with the Fiscal Responsibility and Budget Management Act, 2003. This included headroom for the likely impact of the Pay Commission award. However, subsequent developments have led to the fear that the Centre's fiscal position may have taken a beating during the year on account of the farm loan relief package and higher crude oil prices leading to an increase in the subsidy burden.
In fact, risk rating agency Moody's today forecast a deterioration of central government finances and pointed out that the central government's true borrowing need � which equals the reported fiscal deficit plus off-Budget borrowing � could reach 10 per cent of GDP, up from 8 per cent projected earlier this fiscal if global crude oil prices average $110/120 a barrel in 2008-09 and domestic retail fuel prices are not raised further.
Soon after the report was published, the defence services had opposed its recommendations on the grounds that it gave short-shrift to their demands. The matter was referred to a committee of secretaries. It is believed that the issue has been discussed and a final proposal may be put up for Cabinet consideration, officials said.
They added that a final decision could be taken as early as next month, well before six states head for elections to their legislatures. Of these, the Congress-ruled Delhi is crucial, being home to a large percentage of the country's central government employees.
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