Prime Minister Manmohan Singh has approved composition of the 7th Pay Commission, which will revise the salaries of over 50 lakh Central government employees.
In a major New year bonanza for the armed forces, the Prime Minister's Office has informed the defence ministry that the armed forces personnel would henceforth have a separate pay commission, which is delinked from the civilian pay panel.
The setting up of the Commission, whose recommendations will benefit about 50 lakh (5 million) central government employees, including those in defence and railways, and about 30 lakh (3 million) pensioners, comes ahead of the Assembly elections in 5 states in November and the general elections next year.
Govt is likely to find it hard to meet deficit target next year.
The Pay Commission is an administrative system/mechanism that the government of India set up in 1956 to determine the salaries of government employees. The First Pay Commission was established in 1956, and since then, every decade has seen the birth of a commission that decides the wages of government employees for a particular time-frame.
The government may defer the implementation of the sixth Pay Commission award by a year or even two to reduce the fiscal burden of the recommendations that proposed a 28 per cent across-the-board salary increase for an estimated 4.5 million central government employees. The report of the commission headed by Justice BN Srikrishna was submitted to the government on March 24 this year, nearly a fortnight before its 18-month tenure was to end.
India Inc has welcomed the Sixth Pay Commission report that suggested an average increase of 40 per cent in salaries of central government employees and said the move will not lead to a rise in inflation and revenue deficit of the government. Industry body Ficci said the pay hike would not add to inflationary conditions and revenue deficit due to buoyant revenue collections. Also, Ficci said the hike would reduce the problem of governance and attract talented personnel.
'The high court notice could go some way in easing the vitiated civil-military relationship, and the trust deficit between civil servants and the military.'
Central pay commissions in the past have usually been set up after every 10 years and the 10-year period of the current sixth central pay commission would be over by 2015.
After the top brass of the Armed Forces, it now appears to be the turn of scientists of the defence and nuclear establishments to express dissatisfaction over the recommendations of the Sixth Central Pay Commission.
The Commission will now have time until December 31 to submit its report.
The sixth central Pay Commission is examining the feasibility of introducing performance-linked salaries for government employees. The commission has constituted a study group headed by Indian Institute of Management, Ahmedabad Professor Biju Varkkey to develop a model on these lines.The study group has submitted interim reports and is expected to send its final report soon.
Madhya Pradesh has nearly 750,000 employees who would share the benefit of the pay hike.
In a liberal proposal, the Sixth Central Pay Commission has recommended full pension benefit to government employees after 20 years of service, as against the existing 33 years. The hike in gratuity limit to Rs 10 lakh, exclusion of the earned leave encashed while in service from the overall limit, clubbing of earned leave and half-day pay leave for encashment and higher pension to octogenarians are the other liberal steps suggested by the commission.
Officers of the elite Indian Administrative Service (IAS) want their pay scales to be determined on the basis of prevailing market rates. However, they are not ready to give up the substantial perks they enjoy, like palatial bungalows in city centres, number of attendants, guards, drivers and other assorted facilities.
On Monday, around 5,000 nurses of the All India Institute of Medical Sciences in New Delhi went on a strike over their long pending demands, including those with regard to the Sixth Central Pay Commission.
Replying to a Calling Attention Motion, labour minister Oscar Fernandes, however, said there will be no amendment to the Employees' Pension Scheme 1995 in the wake of Sixth Central Pay Commission as the two issues are not related. He said two committees, including one headed by a special secretary, have been set up to review the EPF scheme and ensure that it brings better benefits to the employees.
As around 5,000 nurses went on strike from the afternoon hampering patient care services at the premier hospital, AIIMS Director Randeep Guleria in a video message termed the strike in the time of pandemic as "inappropriate and unfortunate".
Barely out of their teens, the first batch of girls will graduate alongside 300 male cadets from the National Defence Academy.
The notification with regard to the Sixth Pay Commission award is ready and is currently being approved by statutory authorities. Sources said the dearness allowance effective this July is also likely to be announced the same day.
Why did the political system in the country react to these two decisions of the Modi government in a diametrically opposite manner? asks A K Bhattacharya.
The Planning Commission does not foresee any significant disruption of state finances on account of increase in salaries of state government employees.
The Sixth Pay Commission on Monday submitted its report to the government presumably recommending a 40 per cent hike in salary for the central government employees. The commission, headed by Justice B N Srikrishna, submitted its report to Finance Minister P Chidambaram on Monday morning.
This is roughly 70% of the national transporter's budgeted wage bill of Rs 40,435 crore for the current financial year.
A committee headed by Cabinet Secretary BK Chaturvedi has turned down the request for constituting the Sixth Pay Commission to review the salaries and perks of all central government employees.
Do you think the new pay panel proposals will cripple India's economy? Are political compulsions overriding economic sense? Or do you think this is a fair move? Tell us.
The current salary paid by the Delhi government amounts to 17 per cent of the total expenditure.
Finance Commission has got new team who are committed to growth initiatives.
IIM Ahmedabad will provide a performance-linked pay model to the Sixth Pay Commission which has been assigned the task of recommending revised pay scales for central government staff.
The Sixth Pay Commission on Monday submitted its report to the government, presumably recommending a 40 per cent hike in salary for central government employees.
After army personnel and IPS officers, other government employees have now voiced their grievances against the Sixth Pay Commission report, saying the recommendations do not correspond to the increased cost of living but will increase inequality.
Faculty of top academic institutions like the Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs), and central universities say the Sixth Pay Commission's recommendations do not have a direct bearing on their compensation levels. The new pay structure of assistant professors, associate professors and professors will be finalised by an internal committee of the Ministry of Human Resource Development, which would take a couple of months at least.
"The amount of both the family pensions will now be restricted to Rs 1,25,000 per month, which is over two and half times higher than the earlier limit," said Singh, the Minister of State for Personnel.
The recommendations of the 6th Pay Commission, if implemented by the Central government, could result in major negative impact for the fiscal position of the country, though it could be positive for consumption, according to a leading investment banker. The review said assuming the 6th Pay Commission's recommendations were implemented fully, "we judge the impact on the economy should not be as negative this time round". Impact of 5th pay commission was unambiguously negative.
It is not that the government has not done anything to change the format of the annual performance appraisal report, but it is hard to tell what difference these will make.
The government on Wednesday said it would tax only 40 per cent of salary arrears to be paid to central government employees in the current fiscal on implementation of Sixth Pay Commission recommendations.
The government will mop up Rs 1,400 crore (Rs 14 billion) this fiscal by taxing the second instalment of arrears due to central government employees, who were awarded increased salaries by the Sixth Pay Commission.
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