Pros and cons of Sixth Pay Commission and its impact on people

New Delhi, Tue, 25 Mar 2008 Noor En Ahmed The sixth pay commission yesterday submitted its report to Union Finance Minister P Chidambaram recommending hefty increment in the current salary of Central Government Employees to establish the government employees equivalent to private sectors’ employees, as per sixth pay commission claimed in its report. The Commission has recommended hiking 20- 40% salary from the current salary structure and it would now be two to three folds in terms of gross salary as against the current basic salary. This margin increment would put an additional burden on Central Exchequer of Rs. 7,975-crore per year while a lump sum of Rs. 18,060-crore will be spent in paying the credit money of employees in the form of arrears as the commission has recommended to implement the salary structure from January 01, 2006 and the difference of this period would be paid in the ‘arrear’ form, as per the commission’s submitted report. The minimum salary, as per commission’s recommendation would be Rs.6,600 while the maximum salary would be Rs. 80,000 (except Central Secretary’s salary that is recommended to Rs.90,000-per month) that will be two to three times from the current basic salary and will damage the exchequer of states as now the states will also have to follow the Central’s pay structure because the states’ employees will demand the similar status from their government. As per pay commission’s record, the recommendations of the second pay commission had put the additional average burden on exchequer of Rs. 39-crore that were extended after every pay commission’s recommendation. It rose to Rs 144 crore, Rs 1,282 crore and Rs 17,000 crore in the third, fourth and fifth recommendations respectively. Now, it is estimated that it may go to Rs.20,000-crore (excluding savings of the states) in the 2008-09, while pay commissions earlier reported that up to 90% of the total revenue were spent only in paying the salary and pension of the employees and beneficiaries. This recommendation might prove the ‘panic’ decision for the state governments. On the other hand, for the employees and pensioners, this recommendation can be proved as a ‘golden hen’ that can boost the living status of the government’s employees and can also eradicate the complaint of the beneficiaries who always accuse ‘government’ for giving such low salary in which they can hardly survive in these inflammatory circumstances. A lower and lower-middle class family (the maximum number of persons belongs to these categories and highly depended on their salary) usually seeks the normal living standard including bread-and-butter, cheap and best shelter, moderate clothes, good education for their children, sufficient medical facilities, average status of marriage of their children, reasonable living status and adequate money after retirement. The pay commission evaluates all these things and decides the parameter of the salary scale as it claims. According to sixth pay commission report, ‘It was mandatory to raise the broad increment in the government employees’ salary to prevent the migration and to compete with the private sectors.’ The trend of migrating from government jobs to private sectors jobs have been increased since last four-five years as the salary difference between both the sector’s employee were increasing rapidly. What is Pay-Commission and why government needs to establish it? A pay commission is a group of some honorary members of selected areas that is organised by the Union Cabinet to examine several aspects of government’s employees’ compensation package and living standard that include pay and allowances, retirement benefits, conditions of service, promotion policies. The Central Pay Commissions have been set up so far at the gap of 10 to 13 years. The first pay commission was established in 1946, second in 1957, third in 1970, fourth in 1983, fifth in 1994 and sixth pay commission was set up at a largest gap of 22 years in 2006. While fixing the salary of the government’s employees, the pay commission analyses the growth rate of the nation, the rate of inflation, the growth rate of per capita income, the changing trend in the living standard and the employees’ share in the respective field of working. The general criteria of fixing salary Usually, pay commission first fixes the lowest level of salary and then the highest; after this it becomes easier to determine other salary brackets. The commission also considers about the gap between the post-tax salary of minimum and maximum and set up according to requirement. In the first pay commission’s recommendation, the difference ratio was 1:55 times while it became 1:16 in 1996. Now, in this newly recommended report, commission has established the salary ratio of 1:12 (minimum Rs.6,600-maximum Rs.80,000). Useful Links: Sixth Pay Commission has updated the salary calculator. User can calculate their salary by clicking the following links: http://6pc.in/calc/