Wednesday, March 2, 2016

How much did actually FM make provision for pay hike ?

ll it the impact of the 7th central pay commission recommendations. The 35 lakh central staff across 56 government departments, including the Railways but excluding defence, have been provided a fat allowances bill of Rs 88,932 crore in the Budget, almost as much as the total pay bill of Rs 90,598 crore.
According to the budget estimates of 2016-17, the total pay bill has increased by Rs 28,300 crore to Rs 90,598 crore in the next financial year as compared to Rs 62,230 crore in 2015-16. The allowances bill has gone up by Rs 37,000 crore, taking the amount to Rs 88,932 crore in next fiscal.

The total provision towards pay, allowances and travel expenses of central staff has been to the tune of Rs 1,83,935 crore in the next fiscal as against the Rs 1,18,248 crore in this financial year. The government has made provisions as per the recommendations of the 7th central pay commission (CPC), though the actual disbursement would depend on the suggestions of the empowered committee of secretaries which has been constituted for the implementation of the CPC recommendations.
The pay panel had calculated the total impact of the increase in salaries and allowances at Rs 1.02 lakh crore of which it had estimated the increase in pay to be at Rs 39,100 crore and allowances at Rs 29,300 crore. In percentage terms, the overall increase according to the pay panel was about 23.5% where the increase in pay was 16% and the allowances at 63%.
The significant jump in allowances could be on account of house rent, which has been recommended at 24% of the basic pay, besides others. The minimum pay as per the pay panel report was set at Rs 18,000 and the maximum at Rs 2.25 lakh for secretary-level officers. Accordingly, the house rent allowance (HRA) for secretaries would be more than Rs 56,000.
However, this is not the first time that allowances bill is likely to be as much or more than the pay bill. In 2014-15, the salary bill as per actual expenditure was Rs 53,371 crore while the allowances was Rs 76,613 crore.
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