Uttar Pradesh C.M. assures pay hike

Chief Minister Akhilesh Yadav affirmed the commitment of his government for extending the benefits of the pay hike to state employees following the Seventh Pay Commission report, which is likely to be implemented by the Centre for its employees from April 1.

 “We have to implement the Pay Commission recommendations in the state. The state government will ensure hike in salary, pension and allowances to both retired and serving state employees as soon as the report is implemented by the Centre,’’ the CM assured in Lucknow on Friday.  

Ever since the Second Pay Commission report was tabled in 1960s, most states started following the Central Pay Commission’s recommendations, and announced similar hikes for state staff albeit with some modifications. 

Sources in the Finance department said the implementation of the report would put an additional annual financial burden of over Rs 35,000 crore on the state coffers. They said that the state exchequer could absorb the burden but it would wipe out the revenue surplus estimated to be Rs 28,200 crore in 2016-17. 

“After absorbing the additional burden, nothing will be left for financing capital expenditure from the revenue account. The government will then have to depend solely on borrowings for financing development projects,’’ an official said.

On February 6, at a pre-budget meeting with the Union Finance Minister, the CM had urged the Centre to share 50 per cent of additional financial burden for a few years arising out of the implementation of the Seventh Pay Commission report with retrospective effect from January 1. 

Submitted in November last, the Pay Commission has recommended 23.55 per cent hike in pay, allowances and pensions of Central employees from January 1, 2016.

Referring to past experiences, the CM said that the huge burden due to implementation of the report would force the state to divert funds from capital expenditure for development to meet non-plan expenditure like salary and pension.

Till the current fiscal 2015-16, the total outgo on account of salary and pension in the state is over Rs 1.10 lakh crore and it will increase by Rs 10,000 crore in 2016-17, which is more than 50 per cent of total revenue receipts of the state.