7th Pay Commission – An unjustified pay hike
An unjustified pay hike
As we brace for another series of Pay Commission-mandated salary hikes, the question is if it is the best use of government resources.
As public servants get ready to enjoy the New Year’s blessing that the Seventh Pay Commission is expected to bestow, it may be a time for the rest of us to look this gift horse in the mouth. The Fourteenth Finance Commission estimates the cost of the Sixth Pay Commission at over Rs. 90,000 crore annually, since pay and allowances of Union government employees more than doubled between 2007-08 and 2011-12. Compare this to the estimates in the economic survey for the year 2011-12, about Rs. 70,000 crore each for food subsidy, fertilizer and petroleum subsidy and less than Rs. 40,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act. Simply put, the additional Central government expenditure due to the implementation of the Sixth Pay Commission was over 40 per cent of the major subsidies. If we take into account the costs to the State governments, the tab for Sixth Pay Commission largesse is probably equivalent to all the subsidies provided by the Central government.
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