Diwali’s come early for Central Government employees, who total 50 lakh in all. On Thursday, the Centre announced that it would raise salaries of all its employees by an average of 21 per cent.
The seal of approval on the Sixth Pay Commission recommendations came with some improvements suggested by a committee of secretaries.
<b1>Now, the junior-most Central employee will be paid at least Rs 10,000 per month, said Expenditure Secretary Sushma Nath. The senior-most employee would get at least Rs 1 lakh.
The decision was timed ahead of Prime Minister Manmohan Singh’s term’s last Independence Day address to the nation from the ramparts of Red Fort on Friday. The pay panel, headed by Justice Srikrishna, had submitted its report in March 2008.
Singh played a key role in ensuring that the demands put forth by the employees, civilian and defence personnel were not rejected on the grounds of financial constraints.
The pay hikes will, in all, cost the exchequer an extra Rs 5,237 crore this year.
While the Armed Forces Headquarters Association cheered the announcement, Indian Police Service (IPS) officers were glum as none of their major demands were met, including risk allowance for constables. “Justice has not been done… It is for society to think what kind of police force it wants… Who will join this service?” a member of the IPS Association said in Delhi.
The notification, expected in a fortnight, will cover pensioners as well.
The salary hikes are with retrospective effect from January 2006, while the allowances will be effective from September 1. Forty per cent of the Rs 29,373 crore arrears will be received this financial year, while the rest will come in the next fiscal.
The pay hike would cost the Centre Rs 17,798 crore annually, pushing its wage bill to Rs 87,000 crore.
The huge inflow of disposable income in the hands of government employees — that will come ahead of Diwali — could further push up prices. Inflation, according to data released on Thursday, was at a 13-year high of 12.44 per cent.
The pay commission had been constituted under pressure from the Left in 2006. Now, pressure has already started building on state governments for a similar hike.
Two years ago, Gujarat and Madhya Pradesh had advised the government against constituting the commission, saying they could not afford the hike. On Thursday, the Bharatiya Janata Party said the hikes were a move to net votes.
Three states, including Delhi, go to the polls in a few months. The Lok Sabha elections are expected early next year.