Tuesday, January 12, 2016

New pay commission, new hopes for central govt employees

New Delhi: After long wait, the new pay commission report has been submitted to Finance Minister Arun Jaitley on November 19, which has increased new hopes among the central government employees that their pay will soon rise.

Finance Minister Arun Jaitley said, Seventh Pay Commission award bill Rs 1,02,000 crore can be afforded.

A commendable initiative , the new Seventh Pay Commission award is timely and necessary for the 48 lakh central government employees and 52 lakh pensioners including dependents.

Government jobs in India have been less rewarding in terms of pay and perks. Apart from a sense of job security and perceived power, most of the employees have to struggle to make ends meet with the cost of living going up every year.

The central government is facing a shortage of around 7.3 lakh staff, the motive behind this move is to achieve a reduction of 10 percent in staff strength in five years, according to report of the Seventh Central Pay Commission.

So, Central government employees need to do more works so as to fill up the shortage of staff with their works, accordingly, they deserve a good pay raise.

However, since the submission of the the Seventh Pay Commission report, discussions hovered around its impact on a number of areas including inflation, budgetary allocation, efficiency of public services.

Economists have explained adequately why there will be no inflationary pressure on the economy due to injection of pay hike amount in next next budget and the Finance Minister Arun Jaitley said, Seventh Pay Commission award bill Rs 1,02,000 crore can be afforded.

The World Bank report also forecasts India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8% in fiscal 2016-17, more than a percentage point higher than China, despite pressure on the budget from a salary hike for central government employees and payment of One Rank One Pension. (OROP) .

The pay hike on the Seventh Central Pay Commission recommendations is only a nominal amount compared to the total consumption and total national income of the country.

Many analysts are harking back to the experience of earlier pay commission awards to judge the impact this time.

Such comparisons need great care. The earlier Sixth Pay Commission’s recommendations were implemented in August 2008, with a retrospective effective date of January 1, 2006, which gave almost Rs 18,000 crore in the form of arrears to the central government employees.

The last salary hike in 2008 was much higher at 40 per cent, against 23.5 per cent this time.

Moreover, the last award included pay arrears for almost two years, putting far more cash in the hands of government servants but this pay commission award will be included pay arrears only four to six months.

However, the price hike of goods and services by unscrupulous people, particularly in sectors such as vehicles, urban households and housing, during the period of post-salary increase is common in the country.

The implementation of the Seventh Pay Commission’s recommendations is also expected to increase consumer demand. It is estimated that the consumption boost to the economy could be as high as Rs 55,350 crore, and would have a positive impact on sales for the sector.

The Seventh Pay Commission award with modification of higher pay will hopefully attract central government employees to live with dignity and the quality of service delivery in central government offices is expected to improve which will in turn contribute to higher productivity and growth for the nation.

Source : http://www.tkbsen.in/2016/01/new-pay-commission-new-hopes-for-central-govt-employees/

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