New Delhi, July 20
Keeping an eye on the next general elections, the Union Cabinet today approved the setting up of the Sixth Pay Commission for the 3.3 million Central Government employees, which may cost the government an additional financial burden of around Rs 20,000 crore towards salary and pension hike.
Announcing the Cabinet decision, Parliamentary Affairs Minister Priya Ranjan Dasmunshi said the three-member commission had been given 18 months to submit its
recommendations. The decision comes five months after Prime Minister Manmohan Singh announced the setting up of the commission. The Centre had consulted the state governments on the issue, of which 16 had sent their comments.While BJP-ruled Gujarat and Madhya Pradesh opposed the setting up of the commission, six others — Karnataka, Assam, Tripura, Orissa, Manipur and Nagaland — wanted the Centre to share the burden, he said.
The previous pay commission, the recommendations of which were implemented in 1996-97, had raised the exchequer’s burden by Rs 17,000 crore a year and also heavily burdened the states, forcing the then Finance Minister to come out with a financial package to bail them out.
The commission, which would have two members apart from the Chairman with the Minister of State rank, would also examine the need and quantum to sanction interim relief to the employees, Dasmunshi said.
Dasmunshi said views of the states were sought because once a decision was taken on pay commission for the Central Government employees, the state governments were expected to face similar demands from their employees.
The Cabinet decision sets aside the recommendations of the 11th Finance Commission that had said there should be no pay panel for the Central Government employees in future.
The decision on the Sixth Pay Commission has been taken despite the economic survey cautioning the government to remain vigilant and exercise caution while implementing the Sixth Pay Commission award.
The survey for 2005-06 had pointed out that in the aftermath of the implementation of the Fifth Pay Commission’s recommendations, the general fiscal deficit increased every year to reach a peak of 9.9 per cent in 2001-02.
“The government needs to avoid a repetition of a similar deterioration (of fiscal situation) in the medium term,” the survey had said.
Reacting strongly to the Cabinet decision, business chamber PHDCCI said hike in the salary of government employees was paid by the poor through higher taxes and opportunity costs of money that could have been spent on physical and social infrastructure. Central trade unions criticised the government for not announcing interim relief while deciding to set up the Sixth Pay Commission.
