Merge DA with basic this year and defer increments: pay panel member
Member of the Seventh Central Pay Commission Rathin Roy has suggested that to meet its fiscal deficit target the Government should merge the basic pay and dearness allowance (DA) of central government employees in the current year and defer implementing any real increases in pay and pensions. This, the member has said, could be done by compensating those who would have to bear the burden of the deferred effect by giving them a “more generous award distributed over several years”.
“I am saying that the increment need not all be given at one go… It can be staggered and made more generous… So this could be done for pay and for pension,” Dr. Roy told The Hindu in an exclusive interview. “Now I am not competent to say whether this is politically feasible or not,” he, however, added.
Last month, the Union Cabinet set up an empowered committee of secretaries under the Cabinet Secretary for processing the recommendations of the Commission.
The pay and pension revision recommendations of the Commission are scheduled to take effect from January 1, 2016, but Dr. Roy, who is also the National Institute of Public Finance and Policy’s Director, has suggested that the implementation should be pushed to April 1.
What they should get, from April 1, 2016, is what they would get if we merge the basic pay and the DA, which is more or less what they are already getting, he said. “That will mean some increase in allowances but other than house rent allowance the burden of that [on the government budget] will not be very high.” He has also recommended that the Government defer allowances, principally the house rent allowance. “The case for that is strong because we are in the midst of fairly flat growth in consumption expenditure and rents are not going up much.”
Ahead of the presentation of Union Budget 2016-17, the Government is considering options for keeping the fiscal deficit for the next year within the Fiscal Responsibility and Budget Management target. The Government’s fiscal deficit in 2008-09, the year the Sixth Central Pay Commission award was implemented, doubled to 6 per cent, though not all of the increase was on account of the pay and pension hikes. Currently, Central government pay and allowances account for 1 per cent of the country’s GDP.
The Seventh Pay Commission, which submitted its report in November 2015, estimated that the total financial impact due to the hike in pay and allowances of central government employees recommended by it would be Rs 1,02,100 crore. Of this, Rs 73,650 crore will be borne by the General Budget and Rs. 28,450 crore by the Railway Budget. The Commission was set up by the UPA government in February 2014 to recommend revisions of remuneration for 48 lakh central government employees and 55 lakh pensioners.
Read at: The Hindu
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COMMENTS
Sir, As per CAT order when we will get pre-2006 retired pensioners arrears. Please let know sir.
In Andhra Pradesh pay commission is for every 5 years and they are able to manage the budget.Thereby a class I officer officer in Central Govt is getting less salary and pension after retirement than an class II officer or retired Head master.
So let the Central Govt implement the pay commission recommendations early
Does merger benefit monetarily, if resultant allowances are deferred? Merger is an Administrative decision. A commission is not needed for this.
I wish , the member must have never come up with his suggestion. It was wise on his part to have recommended for stopping employment and increments till Govt. financial position becomes sound. What will happen if petrol prices rise to highest ?
Whether the honourable member will be satisfied with 5th pay allowance for the work.
The salary of the Central Govt employees revise once in ten years. It is injustice to delay the benefits of pay revision. However, to manage the fiscal prudence, the salary should be revised in every three years.
It would be more a practical proposition to implement the 2nd option( applying an mf of 2.57) now and if necessary delay the option 1 till such time the govt feels it necessary as this option in any case involves delay in its processing also.