NO PROPOSALS TO HIKE MINIMUM WAGE
& FITMENT FORMULA REVISION – GOVERNMENT
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.
(d) No such proposal is under consideration of the Government.
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