JOIN USThe pay revision to be implemented by the State government from Sunday may bring smiles to the face of over 12 lakh employees, but it is likely to usher in a sea change in the character and strength of the staff in the next few years.
In order to cope with the increase in the salary expenditure caused by the pay revision announced in the 2012-13 State budget, the government may have to shelve all its expansion plans, completely freeze all recruitments, resort to outsourcing and, more importantly, prune staff strength drastically.
The Official Pay Committee (OPC) headed by Additional Chief Secretary Subir Hari Singh has in its report to the government recommended all these measures and more to cushion the impact of the “significant” increase in salary expenditure, which is estimated to impose an additional burden of Rs 4,450 crore per annum on the exchequer.
The pay revision was also based on the OPC recommendations. The government has not yet announced whether it has accepted all the recommendations of the report or just the salary and allowance revisions. Chief Minister D V Sadananda Gowda has only announced that the salary and allowances will be revised upward as recommended by the committee. He has also not announced so far whether the revision will on a par with the propsals.
As part of the pruning exercise, the OPC has urged the government to abolish all posts that have remained vacant for over three years.
Of the 6.96 lakh sanctioned posts of the State government, excluding various boards and corporations and urban local bodies, about 1.55 lakh are now vacant. A majority of them have remained vacant for more than three years.
This is because the OPC, in its study on the “Impact of Pay Revision on the Fiscal Position,” said the pay revision will not only bring stress on the State finances, but also shrink the government’s planned spendings in the next three years.
And it was evident in the 2012-13 budget that the total plan size for the current year is fixed at Rs 42,030 crores, which is just 10.4 per cent larger than that of 2011-12 fiscal. In 2011-12 the plan size had increased by 22.5 per cent compared to its previous year. This, in other words, means that the government will spend less on the key sectors of education, health, agriculture and energy and more on the salaries of its employees. “In order not to violate the Karnataka Fiscal Responsibility Act mandate of maintaining revenue surplus, revenue expenditure will need to be compressed for the next three to five years. As there is little flexibility in controlling non-plan revenue expenditure, most of the burden of control will fall on the plan stage budgetary support,” the OPC stated.