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| Government employees damn happy, but what about others | | | | The 40% rise in the salaries of Central government employees, with 100% increase in other allowances, recommended by the Sixth Pay Commission, which the government is likely to accept and implement in Toto or with little variations, comes as a bonanza to the employee of the government of India at any level and in any Central department and organisation. But the economic implications of this pay hike and the burden on the public exchequer leads to many apprehensions about the actual achievement of its desired purpose. This liberal largee to its over 40 lakh employees is going to cost the public exchequer a whooping sum of rupees 12561 crore annually and since the same is sought to be applicable retrospectively with effect from January 2006, it will put additional one time burden of rupees little over 18,000 crore on the government to disburse arrears to the employees. With the Central government revising salaries of its employees upward, the employees of various state governments will press hard for similar hike in their salaries, which the state governments may not be able to resist. In the case of poor states like Jammu and Kashmir, where the government depends even for giving salaries to its employees on the assistance from the Central government, the Centre will be obliged to give them additional financial assistance to meet the major portion of the burden. After loan waiver to the farmers amounting to 60,000 crores this additional burden of 40,000 crore for the year 2008—2009 on account of increase in the salaries of the union government employees, together with payment of arrears, the balancing of budget is going to be upset. From where this huge amount of money will come is a matter of conjecture and speculations. No additional allocation is kept in the union budget for allowing increased salaries and allowances to its employees. While the lot of an entrant into the Central government service at the lowest level is going to be improved with the minimum salary of Rs 6,660 recommended by the commission, the highest ceiling of Rs 90,000 salary per month for the cabinet secretary and the Rs 80,000 pm for other central government secretaries, besides considerable increase in other allowances will definitely come as a boon to all the beneficiaries. Although the revision of pay scales of the government employees was due because of rise in the cost of living, due to rising spiral of prices as well as the salaries and perks in the corporate sector surpassing what is being given to its employees by the government and as a result rising brain drain from the public sector to the private corporate sector, many exceptionally capable officers leaving the government and joining the private sector, with their vast experience. But the likely inflationary impact of the pockets of Central government employees getting much heftier, with the pockets of employees of various state governments also getting heavier in due course of time, presents an alarming scenario. In all probability the already sky rocketing prices of essentials are going to rise much further as a result of much increased purchasing power of the government employees. The non salaried sections in the society and even the salaried workers in small businesses and ventures as well as the self employed are going to be hard hit as a likely inflationary impact of big rise in the salaries and perks of government employees. |
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