After getting pay hikes last year on implementation of the 7th Pay Commission, the central public sector enterprises (CPSEs) are likely to spend additional Rs 20,000 crore in the next fiscal year (FY17-18) as recompense to 12 lakh employees.

As per 7th Pay Commission, in the first installment, four lakh CPSE executives will likely to receive salary revision in July with effect from January 1, 2017. The expected cost for the same will be Rs 8,000 crore per year, as reported by The Financial Express.

Additionally, the pay hikes are likely to be followed by a wage revision for over 8 lakh workers which will cost CPSEs nearly Rs 12,000 crore, the report said quoting a source.

As per the report, this salary revision is based on the recommendations of the 3rd Pay Revision Commission (PRC), which constitutes the department of public enterprises, and the exercise will be carried out by each CPSE separately after negotiating with the employee unions.

Last year in June, as per The Economic Times report, the government had appointed a committee to review and revise the structure of salary at CPSEs.

That time, the government had released a notification, which said, The step was taken on recognising that in the prevailing business environment the CPSEs have to be commercially viable and competitive, and that the employees of the CPSEs have to be provided with suitable working conditions, emoluments and incentives to motivate them to strive for further growth, productivity and profitability of their enterprises.
Source: Zee News

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The Budget documents state that the implementation of the Seventh Pay Commission due from January 1, 2016 is to be implemented during the financial year 2016-17.

“The government has made provisions for the additional liabilities on these count,” it said, without giving the amount allocated for implementation.

With absence of an explicit overall provision for the 7th Pay Commission in budget raising questions, government on Wednesday said the once-in-a-decade pay hike has been built in as interim allocation for different ministries and budget numbers were credible.

Economic affairs secretary Shaktikanta Das said the number cannot be quantified and it has been built up in budget of various ministries. “We cannot really quantify how much we require in 2016-17. Because the Committee of Secretaries have to first give its recommendations, then govt will take a decision and then only we will know what is the requirement in FY17,” he said in New Delhi.

Implementation of the pay commission report is to cost the government Rs.1.02 trillion. “We have the Pay Commission recommendations with us, we have analysed the likely requirement and it has been built into the Budget of various ministries. Some suitable interim provisions have been made,” he said without elaborating.

“Hence the expenditure and revenue numbers are credible.” Das said finance minister Arun Jaitley in his budget speech stated that interim provisions have been made. “And these provisions are there in the Demands for Grants for individual departments and ministries. It is built into and subsumed into those allocations.”

“The Budget reaffirmed the commitment of the government to continue with the process of fiscal consolidation as projected in the Medium Term Fiscal Policy Statement of 2015-16 despite a tough external environment,” the budget documents said. Accordingly, fiscal deficit has been projected at 3.5% of the GDP in 2016-17.

“In accordance with the amended FRBM targets, the fiscal deficit of 3 per cent is projected to be achieved in 2017-18 onwards.” “Keeping in view the challenge of reduction of fiscal deficit by 0.4 per cent of GDP in a difficult year in 2016-17 with substantial additional liabilities on pay revision etc, the government is quite optimistic of fully achieving the fiscal deficit target of 3 per cent or below by March 2018,” the documents said.

With PTI Inputs

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Ministries and departments can raise afresh the demand for pay revision if they find that some of the justified suggestions made by the staff associations were rejected by the 7th Pay Commission.

Such demands could be submitted to the Implementation Cell (IC), created in the Finance Ministry, to work as Secretariat for the Empowered Committee of Secretaries headed by Cabinet Secretary P K Sinha.

The CoS will screen the recommendations of the Commission and firm up the conclusions for approval of the Cabinet.

“If a representation was made by a Staff Association before the 7th Pay Commission and the Commission after due diligence has not accepted the demand made there in, the same matter normally not be considered at the stage.

“However, if departments consider that the issues are of such nature that they require consideration at this stage also, then they may give their comments with full justifications to the IC,” said the minutes of the of first meeting of the IC.

While a number of ministries/departments have sent their comments and nominated their Nodal Officers, the comments received from some ministries are “simply in the nature of forwarding” the representations of the staff associations without their comments.

The recommendations when implemented would have bearing on remuneration of 47 lakh central government employees and 52 lakh pensioners. Subject to acceptance by the government, the recommendations will take effect from January 1, 2016.

Minutes of the meeting, held on February 2, also said it was also impressed upon the Nodal Officers of ministries and departments that “in case, there is any need” consultation with the Staff Association at the level of department, “the same may be done as per the assessment of the department”.

Further, if a department is of the view that any recommendation needs modification, adequate justification should be brought out while sending the comments to the IC.

The meeting was held to formulate the action points on processing of Commission.

Inputs with PTI

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7th CPC Salary hike: Bank of America estimates the salary raise to be at 15%, Religare puts it at 28 to 30%. Credit Suisse expects a salary hike of 40%. – International Business Times Report

How Pay Commissions Play a Key Role in Boosting India’s Growth

Read at: International Business Times

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