New Delhi: The implementation of the recommendations of seventh pay commission may be deferred in the wake of the massive financial resource crunch faced by the government in the financial year 2016-17.
The 7th pay commission was to be implemented from Jan 1, 2016.
According to a Business Standard report, the Union Cabinet approved the formation of an empowered committee of secretaries last week to work out ways for staggering the award through more than one financial year.
“One of the options for the empowered committee was to defer the increase in allowances for central government employees, while letting the rise in pay for all scales to go through,” Business Standard quoted its Finance Ministry source as saying.
The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29.
“The ratio of allowances to pay for these 4.7 million employees is 1:1.4. For instance, the Budget estimates in 2015-16 pegged the salary bill for all central government employees at Rs 60,731 crore, whereas the tab for allowances is Rs 84,437.4 crore,”the report quoted finance ministry figures.
In a recent television interview, Minister of State for Finance Jayant Sinha had said the Pay Commission recommendations were the biggest headache for his ministry, struggling to keep the aggregate expenditure of the Union government under control.
The 7th Pay Commission has recommended increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17.
Several rating agencies and brokerages have said that a proposed 23.6 per cent hike in salaries and pensions of government employees could hurt India's finances.