7th Pay Commission Report, Burden on finance/exchequer, Productivity
linked pay hike and any alternative of future Pay Commission
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
LOK SABHA
UNSTARRED QUESTION NO: 1652
ANSWERED ON: 27.07.2018
Pay Commission Reports
RAJENDRA AGRAWAL
Will the Minister of FINANCE be pleased to state:-
(a) whether the reports of successive Pay Commissions have been
increasing the burden on Government finances/exchequer in partially
accepting their recommendations for increase in wages and if so, the
details thereof;
(b) whether the last Pay Commission has suggested productivity linked
pay hike to the deserving employees to eliminate below average or
mediocre performance and if so, the details thereof;
(c) whether such periodic hikes in wages resulting from Pay Commission
recommendations trigger similar demands from the State Government/public
utility employees, imposing burden on already strained State finances
and if so, the details thereof; and
(d) whether the Government is considering an alternative for increasing
the salaries and allowances of Central Government employees and
pensioners in future instead of forming Pay Commission and if so, the
details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI P. RADHAKRISHNAN)
(a) The financial impact of the recommendations of the Central Pay
Commission, as accepted by the Government, is normally pronounced in the
initial year and gradually it tapers off as the growth in the economy
picks up and fiscal space is widened. While implementing the
recommendations of the last Central Pay Commission, i.e., the Seventh
Central Pay Commission, the Government staggered its implementation in
two financial years. While the recommendations on pay and pension were
implemented with effect from 01.01.2016, the recommendations in respect
of allowances after an examination by a Committee have been implemented
with effect from 01.07.2017. This has moderated the financial impact of
the recommendations. Moreover, unlike the previous 6th Pay Commission,
which entailed substantial impact on account of arrears, the impact in
the year 2016-17 on account of element of arrears of revised pay and
pension on the present occasion of the 7th Central Pay Commission
pertained to only 2 months of the previous financial year of 2015-16.
(b) The Seventh Central Pay Commission in Para 5.1.46 of its Report
proposed withholding of annual increment in the case of those employees
who are not able to meet the benchmark either for Modified Assured
Career Progression (MACP) or regular promotion within the first 20 years
of their service.
(c) The service conditions of employees of State Governments fall within
the exclusive domain of the respective State Governments who are
federally independent of the Central Government. Therefore, the
concerned State Governments have to independently take a view in the
matter.
(d) No such proposal is under consideration of the Government.
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Source: PDF/WORD(Hindi) PDF/WORD
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