Thursday, September 26, 2013

7th Pay Commission: Who will foot the bill after two years?

When the UPA government announced the constitution of 7th Pay Commission on Wednesday it was clear that the generous move was meant to gain the electoral mileage during the assembly elections in 5 states in November and the general elections next year.

The government however, did not spell out the details of the resources to meet the new expenses and the nitty-gritty of the new economic liability. It will be the next government, which comes to power in 2014, that will have to look into its implementation and meeting the additional budgetary responsibility.

The UPA government's yet another populist measure of Food Security Bill 2013, which will cost India Rs.1,24,723 crore per year.

Coming in support of Government employees, Commerce and Industry Minister Anand Sharma said that Pay Commission was the right of the employees. He expressed confidence that the Government will be able to fund the pay commission award.

The setting up of the Commission, whose recommendations will benefit about 50 lakh central government employees, including those in defence and railways, and about 30 lakh pensioners, comes ahead of general elections next year.

The government constitutes Pay Commission almost every ten years to revise the pay scales of its employees and often these are adopted by states after some modification.

As the Commission takes about two years to prepare its recommendations, the award of the seventh pay panel is likely to be implemented from January 1, 2016, Finance Minister P. Chidambaram said.

The Sixth Pay Commission was implemented from January 1, 2006, fifth from January 1, 1996 and fourth from January 1, 1986.

The names of the chairperson and members of the 7th Pay Commission and its terms of reference will be finalized shortly after consultation with major stakeholders. The average time taken by a Pay Commission to submit its report has been around two years.
-India today

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