Thursday, September 26, 2013

   Media hype about 
pay panel
UPA government advances constitution of 7th pay commission by two years with an eye on votes — but at what cost?
If anyone gets the benefit out of pay panels, these are the Bureaucrats’- joint Secretary and above, whose Salaries, Perks & Pensions get 3times or more hike & in whose case pre & post retirees become at par
No one will feel the pinch just Stop British days’ special treatment to Bureaucrats’ and stop SCAMS

 Montek Singh Ahluwalia & Ajay Makhan the then Union Minister
then the  Media reports
Statement  of  Montek Singh  Ahluwalia Deputy Chairman Plan  panel  reported  by PTI
Pay hike not to hit finances
Plan panel sees no crucial impact of govt. staff salary rise
New  Delhi  27. 02.. 2008 –P   T  I
THE PLANNING Commis­sion does not foresee any sig­nificant disruption of state crease in salaries of state government employees.
"I don't think that this dis­ruption is going to be all that crucial," Planning Com­mission Deputy Chairman Montek Singh Ahluwalia said on the possible impact of the adoption of the Sixth Pay Commission award by state governments.
The Pay Commission, con­stituted by the central gov­ernment, is expected to sub­mit its report by early April and state governments would be under pressure to revise the salary of state em­ployees, once that happens.
Pointing out that blind adoption of the Pay Commis­sion's award by state government was not a good idea, Ahluwalia said Pay Commis­sions were constituted once in 10 years and the states can do many things to neutralise the impact.
The government, he said, was made to effect a big in­crease in salaries of its em­ployees at the end of 10 years as the dearness allowance (DA) does not adequately take care of inflation.
"So at the end of 10 years, the government will be benefiting from a squeeze in real pay because the DA was nev­er enough...So you have a big increase," he added.
The Railway Budget has made an ad hoc provision of Rs 5,000 crore for 2008-09 to meet the additional liability towards employees and pensioners in anticipation of the Pay Commission's recommendations.

17 Mar 2013
·                     Hindustan Times (Delhi)
·                     Aloke Tikku

In a move aimed at putting the demand for the 7th Pay Commission on the government’s drawing board, Union minister Ajay Maken has asked Prime Minister Manmohan Singh to set it up this year to neutralise the effect of soaring inflation.
His demand this week is the first voice in support of the panel from within Singh’s cabinet.
“Erosion of real wages owing to the degree of inflation... is hurting employees,” he wrote in a letter accessed by HT. Retail prices rose 160% during 20062011 but dearness allowance went up only 51%.
Besides, Maken argued, it was time to rework the principles on which public sector wages were fixed in order to attract and retain talent. He said it was no longer enough to pay employees to simply meet minimum needs.
The finance ministry, struggling to bring fiscal deficit under control, has rejected demands from government employees to set up the panel — generally appointed in the third year of every decade.

UPA bites pay panel bullet for vote gains
By Mail Today Bureau in New Delhi
THE poll sop opera continues unabated as the ruling UPA dispensation widens the ambit of its vote bank for the 2014 elections. Prime Minister Manmohan Singh on Wednesday approved the constitution of the 7th Central Pay Commission, which will benefit as many as 80 lakh central government employees and pensioners, with an eye on votes in a crucial election year.
“ Prime Minister Manmohan Singh approved the constitution of the 7th pay commission. Its recommendations are likely to be implemented with effect from January 1, 2016,” Finance Minister P. Chidambaram said on Wednesday.
The 6th pay commission was constituted in 2006 and in the normal course, the government is expected to announce the next pay commission after a gap of 10 years. The fifth came in 1996.
But with the UPA government’s image battered by a spate of corruption scandals, the date has been advanced by two years in order to recover some lost ground with the electorate. The decision comes close on the heels of the hike in dearness allowance, to 90 per cent, for government staff announced on Friday.
The fact that the state governments also follow the Centre in hiking their employees’ pay means the announcement impacts many more people beyond the 50 lakh employees and 30 lakh pensioners of the central government.
The government justified the early constitution of the commission on the ground that it will take around two years to submit its recommendations.
The 6th pay commission, for example, was constituted in October 2006 and the Centre implemented it ahead of the 2009 Lok Sabha elections, showering central government employees with a big pay hike bonanza.
The 6th pay commission had recommended a 20 to 40 per cent jump in salary. This cheered the employees, but wreaked havoc with the government’s finances as the fiscal deficit soared to 6 per cent of the gross domestic product ( GDP).
The consequent burden of arrears on the central government was ` 28,160 crore on a salary base of ` 44,360 crore.
Throw in another ` 73,000 crore, forked out by the Indian Railways as arrears and to its vast swathe of pensioners, and you have a deadly burden on the exchequer.
The cash- strapped government had disbursed the arrears in two installments with 40 per cent given out in 2008- 09 and 60 per cent in 2009- 10. The arrears contributed significantly to the Centre overshooting its target in 2008- 09, ending the year with a fiscal deficit of 6 per cent of GDP against the budgeted 2.5 per cent.
The fiscal deficit rose to 6.4 per cent of GDP in 2009- 10 as pay commission arrears pushed up the expenditure at a time when the government was battling slowdown in revenues.
With the 7th pay commission, the situation is headed in the same direction and the country will eventually have to face the music of this populism.
The setting up of the commission, whose recommendations will also benefit those in defence and railways comes ahead of the Assembly elections in five states in November and the general elections in May 2014.
Planning Commission member Arun Maira was quite candid on the issue, terming the constitution of the 7th pay commission as “ an election force”. “ It is an interesting situation since it is election time,” he said when asked about the timing of the decision, “ You need to get elected otherwise you cannot do what you want to do.” The names of the chairperson and members of the newly constituted commission and its terms of reference will be finalised shortly after consultation with major stakeholders.
UPA government advances constitution of 7th pay commission by two years with an eye on votes — but at what cost?

Former DEN C.Rly.
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