GOVERNMENT OF INDIA
MINISTRY OF FINANCE
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.
