6th Pay Commission: 40 pc pay hike | Election ploy?

PAY PANEL REPORT: The Sixth Pay Commission is expected to hand over its report to the Finance Ministry in 24 hours.

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Keywords: Pay Hike, Government Employees

New Delhi: Government employees are in celebratory mode as the Sixth Pay Commission has handed over its report to the Finance Ministry on Monday. A major hike has been announced for Government servants across the board.

The Government will incur a one-time burden of Rs 18,060 crore on payment of arrears in the event of the report being accepted with the salary increase of 77 per cent for the starting level employees.

The hike would be effective from January 1, 2006 as per the prevailing practice.

The maximum salary of Government employees will be Rs 80,000 per month while the minimum salary will be Rs 6,600 per month.

The Commission has reportedly recommended a hike of over 40 per cent in salaries of Government employees at the senior level and substantial salary hike in other categories as well.

As widely speculated, the Commission is silent on the retirement age for government workers.

The existing HRA rate has been retained for A-1 cities while it is higher by 20 per cent for A, B-1 and B-2 cities. For C and unclassified cities the allowance is higher by 10 per cent.

The report recommends that CCA be subsumed in Transport Allowance, and the rate be increased by four times. In other changes, travel is to be paid on actuals.

The Finance Ministry will consider the report and will submit its recommendations to the Union Cabinet.

With general elections round the corner, the Government is likely to accept the recommendations without any cut.

The Commission — the arbitrator in the collective bargaining process between labour and the largest employer in the country, the Central Government — however, faces challenges that seem staggering.

It must deal with the issue of ensuring that key Government posts attract qualified candidates, given the increasing competition from the private sector.

The Fifth Pay Commission in 1996 was a fiscal disaster for the Central and state governments. The Centre had then insisted that state governments too revise the pay of their employees as per the Commission's recommendations.

After the forced revision, state governments had no money left after paying salaries for even normal administration.

Due to the huge pay hike by the Fifth Pay Commission for Government employees, state governments started cutting corners where facilities like healthcare, education and irrigation were concerned.

It took states — especially the poorest states — almost seven years to recover from the financial mess that the Pay Commission put them in.

SIXTH PAY COMMISSION RECOMMENDATIONS

• Pay substantially hiked by an average 40%
• Revised pay to be effective from Jan 1, 2006
• To cost exchequer Rs 12,561 cr in 2008-09
• Additional one-time burden of Rs 18,060 cr toward arrears
• Minimum entry level pay Rs 6,660; Cab Sec to get Rs 90,000
• Mkt driven compensation for young scientists & special posts
• Contract appointment for select posts requiring high skills
• Current age of 60 for superannuation to be maintained
• No exceptions barring scientists & medical specialists
• Number of grades reduced to 20 against prevailing 35
• Existing parity between IAS and IFS to be maintained
• Defence forces at par with civilians in pay and grades
• Rs 6,000 allowance a month for officers up to brigadier rank
• 5-day work week to continue;Only 3 national holidays allowed
• Other gazetted holiday to go, adjusted in restricted holiday
• High performers to get 3.5% increment against normal 2.5%
• Enhanced pay scales for nurses, teachers and constabulary
• Existing rates of most of the allowances to be doubled
• Education allowance reimbursement at Rs 1,000 per child a month against Rs 50 now
• Hostel subsidy to be increased 10 times to Rs 3,000
• Person stagnating at maximum of any pay band for more than a year to be placed in immediate next higher pay band without change in grade
• Performance linked incentive scheme to be introduced
• All fixed allowances to be made inflation proof
• All recommendations to be treated as an 'organic whole' as partial implementation will bring in several anomalies and inconsistencies.