Punjab Govt recruits to get only basic pay

Ruchika M Khanna

Tribune News Service

Chandigarh, December 16

With salaries and wages taking up over 35 per cent of the state’s total revenue, the Punjab Government has decided to pay just the basic salary to all new recruits
(except judicial officers) during their two years of probation period.
The decision was taken during a meeting of the Punjab Cabinet held today under the chairmanship of Chief Minister Parkash Singh Badal. It has been decided that all new recruits in government jobs will only get the basic pay and no grade pay or other allowances. It is only after the completion of the probation period that these employees will start getting the dearness allowance, house rent allowance and other allowances.
Officials in the Finance Department told The Tribune that they haven’t worked out the details of how much money the government hopes to save with this measure, but it will lessen the burden on the state finances. 

This year, the salary and wage bill of Punjab is expected to be Rs 15,841.28 crore, which is 35.28 per cent of the state’s total revenue receipts of Rs 44,893.68 crore. The high salary bill is one of the major causes of the state’s poor financial health. The government had announced this decision some time back and it was also approved by the Cabinet, but it had to be withdrawn following protests.
Playing to the powerful sugar lobby, the Cabinet today decided to waive the 3.3 per cent purchase tax imposed on the seven private sugar mills of the state. The nine cooperative sugar mills in the state are already exempt from paying any purchase tax. The government said that since other stares had waived this tax on cane, they were following suit.  The private sugar mills, operated among others by powerful politicians from across the political spectrum, had threatened not to go ahead with the crushing, if they were not bailed out and taxes imposed on them reduced. Since price of sugar in the international market is low (Rs 2,850 per quintal), the high state advised price of sugarcane – between Rs 280 and Rs 295 per quintal – would have meant that cost of sugar production would go up to Rs 3,200 per quintal.
Sources say that the government has decided to withdraw the purchase tax and asked private sugar mills to clear the arrears of purchase tax.