PM’s Economic Advisory Council recommends Pay arrears to be given in phased manner

Prime Minister’s Economic Advisory Council wants the government to pay its employees in phased manner and deposit part of the estimated arrear of 18,000 crore in their Provident Fund while implementing the Sixth Pay panel report to minimise its impact on inflation.

"Since the payment of arrears in cash could result in marginal rise in inflation rate due to spurt in demand for various products, EAC has said that government should consider depositing part of the arrears due to employees in provident fund and pay the remaining amount in a phased manner," official sources said.

The council headed by noted economist and former Reserve Bank Governor C Rangarajan, is of the opinion that the payment of arrears in one go could result in further rise in prices, especially of manufactured goods and consumer products.

"The government had paid the arrears in a phased manner while implementing the report of previous Pay Commissions, so it can consider it again," Rangarajan had earlier said.

The council, which advises Prime Minister Manmohan Singh on important economic matters, had earlier said the inflation rate could come down to 5 to 5.5 per cent after about four months following good monsoon and measures taken by the government.

Inflation, however, has already crossed 8 per cent mark, and the analysts fear that it could soon touch 10 per cent mark if the hike in international crude oil prices is partly passed on to the consumers.

The Sixth Pay Commission headed by Justice B N Srikrishna, which submitted its report in March, has recommended an average 28 per cent hike in salaries of about 40 lakh central government employees with effect from January 1, 2006.

It estimated that hike in salaries would cost about Rs 12,000 crore annually, while the payment of arrears would put an additional one time burden of Rs 18,060 crore to the exchequer.

The Union Cabinet, which considered the pay panel report last month, forwarded it to a committee of Secretaries headed by Cabinet Secretary K M Chandershekhar, following protest by sections of government employees who are not happy with the recommendations.

Revised pay package for armed forces to be finalised today.

A revised pay package for the armed forces personnel including enhanced Military Service Pay for those below officer rank would be finalised at a crucial meeting to be chaired by the Cabinet Secretary K M Chandrashekar on Tuesday.

Besides the Cabinet Secretary, the Navy Chief Admiral Sureesh Mehta, Air Chief Marshal F H Major and Army Chief General Deepak Kapoor would attend the meeting.

The meeting would also be attended by other secretaries in the empowered group of secretaries set up by the government to go into anomalies in the pay packages of armed forces personnel.

The meeting was scheduled to be held on Monday but was put off till Tuesday, official sources said.

Meanwhile, Defence Minister A K Antony said on Monday that there was no ''large scale'' departures from the services despite the Sixth Pay Commission recommendations not coming up to their expectations.

''Army personnel are allowed to leave service on account of various reasons like suppression, extreme compassionate grounds, low medical category and failure to acquire minimum educational qualification,'' the minister said in reply to a written question in the Lok Sabha.

He put the number of officers who were permitted to leave services due to various reasons during the last five years at 3474.

Find out the arrear calculator based on CPC report here - http://staffcorner.com/sixpcar.php
Discuss the pay commission report at http://www.staffcorner.com/

Sixth Pay Commission - Public View

This is opinion from many sources -
1.There is no performance system adopted.
2.Pay for performance is in vain.
3. secretaries of GOI will decide the fate of Defence Forces and fate of all in general - thats really abusive. Lower cadre employee have no right in this decison making. Abusive to them.
4. Pvt Sector employee says Sixth pay commission is bane for country. Gov people doing nothing.
5. Economist says Gov may suffer inflation, large burden, 5 years slow. Because all state Govs also implement the same pay commission. How this money come.
6. pay commission must have a democratic setup comprising representation of all category of staff
7. its waste of time and resources....till now each n every govt. employee understood the CAKE they got into there mounth after such a hype in media by pay commission..no one is going to believe such cheap tricks by UPA govt. to make there seats strong in parliament....they will also get there part of CAKE in upcoming elections....

8. You want to live happily in India then get into IAS, if not then lick their boots or else leave India
9. it is best to scrap pay commission.But once in three years a wage board should finalise the revision of wage for all govt servants within a time frame of three months. It will boost the sincerity, honesty and productivity and that leads INDIA top of the world.
10. Scientist in DRDO, ISRO , Armed forces may loose good employees fastly.
Pay commission worst for them. Now how a class 1 officer afford accomodation, family expenses etc. in metro. Petrol prices soaring to 50 Rs. and now moving to 65 as fresh news comes crude oil prices are crossing 120$/barrel. How will government stop the inflation.