Central Government considering not to form Pay Commission in future

No new commission may be formed in future for increasing salaries of central government employees, a senior Finance Ministry official told The Sen Times on condition of anonymity.

“The government is going to take a policy decision in this regard,” official told our reporters after issuing the 7th Pay Commission notification.

Pay Commissions makes much impact on the fiscal deficit, since pay commission awards come once in 10 years, the two to three years subsequent to each award tend to be fiscally stressful for the central government. States also suffered major blows to their finances for implementation of pay commission report, he added.

Presenting an idea about an alternative arrangement, he said that the 7th Pay Commission Chairman Justice A K Mathur had earlier told The Financial Express in an interview, “The government should review the salary of central government employees every year looking into the data available to it and based on the price index.”

The 7th Pay Commission recommended that the pay matrix may be reviewed periodically without waiting for the long period of ten years. It can be reviewed and revised on the basis of the Aykroyd formula which takes into consideration the changes prices of the commodities that constitute a common man’s basket, which the Labour Bureau at Shimla reviews periodically.

The Pay Commission also suggested that this should be made the basis for revision of that pay matrix periodically without waiting for another Pay Commission.

So, it will not be necessary to form a new pay Commission after every 10 years for central government employees and pensioners and whether any change is required regarding pay and allowances would be made considering inflation.

Accordingly, the central government is to follow this proposal of the Pay Commission and to discontinue the practice of appointing pay commissions in future to suggest salary structure and other perks for all central government employees and pensioners, the official gave his views.

The official said there would be an officer who would submit a report of inflation to the Finance Minister Arun Jaitley every three years.

He added some changes regarding pay and allowance would be made considering inflation.

Source: TST