Over 4.5 million central government employees can look forward to a bounty this week with Sixth Pay Commission expected to submit its report.
The commission is set to recommend major changes in salaries and terms of employment, including performance-linked pay and incentives.
Although the pay commission, headed by Justice BN Srikrishna and set up in 2006, has not been asked to consider the issue of raising the retirement age from 60, the commission has made an assessment of existing and future liabilities for the government in next four decades.
Government sources said while specific issue of retirement age did not form part of the terms of reference of the pay commission, the government, however, had forwarded references to the matter to the commission for examination.
Sources also confirmed that no proposal was under consideration for grant of interim relief to central government employees and pensioners. The revised salaries will be effective from January 1, 2006.
Finance Minister P Chidambaram in his budget speech last month had said the pay panel’s recommendations would meet the legitimate expectations of government employees. The railway budget for 2008-09 has kept aside Rs 5,000 crore for implementing the Sixth Pay Commission's recommendations for its 1.4 million employees.
The financial impact of the award has been estimated to be within 0.4 per cent of the gross domestic product (GDP), which amounts to about Rs 21,000 crore, according to budget estimates of GDP for 2008-09.
To ensure that the state governments are able to absorb the impact of any wage revision, the commission has also sent a questionnaire to the states seeking details on several counts.
There are close to 15 million state government employees, including quasi-government and staff of local bodies, in the country.