Pay hike not to hit finances- Montek Singh Alluwaliah Then Deputy chairman planing commission on 27.02.2008

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Pay hike not to hit finances

Plan panel sees no crucial impact of govt staff salary rise

New Delhi, February 27 2008

THE PLANNING Commis- sion does not foresee any sig- nificant disruption of state finances on account of in- crease in salaries of state government employees.

"I don't think that this dis- ruption is going to be all that crucial," Planning Com- mission 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, con- stituted by the central gov- ernment, is expected to sub- mit its report by early April and state governments would be under pressure to revise the salary of state em- ployees, once that happens.

Pointing out that blind adoption of the Pay Commis- sion's award by state govern- ments was not a good idea, Ahluwalia said Pay Commis- sions were constituted once

in 10 years and the states can do many things to neutralise the impact.

The government, he said, increase," he added. was made to effect a big in- crease in salaries of its em- ployees 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 bene-

At the end of 10 years, the govern- ment will be benefiting from a squeeze in real pay because the DAdear- ness allowance was nev- er enough...So you have a big increase MONTEKS AHLUWALIA, Deputy Chairman, Plan panel

fiting from a squeeze in real pay because the DA was nev- er enough...So you have a big

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 pen- sioners in anticipation of the Pay Commission's rec- ommendations.

PTI