Print Media on Pay Commission

News from The Indian EXPRESS dated 14th March 2008 (Delhi)

As the Sixth Pay Commissin prepares to submit its report on March 20, a fortnight before deadlilne, the Finance Ministry has started working its numbes considering an average 20% increase in salaries of Central Government employees.

The wages hike, after merging existing allowances with the basic salary, will range from 18 to 25% depending on the slab, sources told The Indian Express. The net impact will be 20%, they added.

Compared to the 200% hike recommended by the Fifth Pay Commission, the increase this time has been deliberately kept at a moderate level as the inflationary impact is anyways being neutralised since July 1996 through revisions in the Dearness Allowance.

These revision, twice every year from January 1 and July 1, are in line with the formula adovcated by the Fifth Pay Commission. A Central government employee's remuneration includes a basic salary, a 50% dearness pay merged with the basic and 47% dearness allowance of the total.

Excluding the arrears that would accrue to the 55 lakh employees, the annual impact of the new wage jump is estimated at Rs.11,000 crore. The new scale will be effecrtive from January 2006 but half of it could be compulsorily put away under the GPF to bring down the instant payout.

This is becuase although Finance Minister P. Chidambaram provided for Rs. 26,657 core or 0.5% of the fiscal deficit as headroom for pay revision and arrears, the margin got reduced due to a supplementary demand for Rs.10,000 crore for the loan waiver of farmers.

Using the average wage hike of 20%, the Finance Ministry has estimated that its impact on states will be to the tune of Rs.46,000 crore.

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News from T V Media

One of our friend from Chennai informs that CNN TV announced today that the Pay commission may increase wages to 33% and it may cost govt. 13 crores. Arrears will be paid in instalments and this will cost Govt. Rs.40 crore.

Which is correct ? We leave it to your decision.