Election sops: Centre forms 7th pay panel

Election sops: Centre forms 7th pay panel

Announcement of election-related sops by the Centre appears to have gained pace before the model code of conduct for the forthcoming Lok Sabha polls comes into force, the latest being approval for the composition of the seventh pay commission despite financial stress on the treasury.

The Centre on Tuesday announced that the pay commission, which is expected to benefit 50 lakh central government employees and 30 lakh pensioners, will be headed by former Supreme Court Judge Justice Ashok Kumar Mathur. 

Recommendations of the panel will be implemented in January 2016.

An announcement regarding the seventh pay commission came late last year, just ahead of the Assembly elections in five states. 

The Centre also made public its intention to roll out the Direct-to-Home scheme to hand over pensions and other wages to beneficiaries and raise honorarium to anganwadi, Asha and mid-day meal workers. 

Award of the latest pay commission is expected to greatly enhance the Centre’s wage bill. Though there is no official estimate, analysts said burden on the exchequer may exceed Rs 50,000 crore. 

Since implementation of the sixth pay commission recommendations, salary bill of the Centre has gone up from about Rs 46,000 crore in 2007-08 to Rs 1.15 lakh crore in 2013-14. For states, the figure rose from Rs 1.36 lakh crore to Rs 2.86 lakh crore. 

Experts said the sixth pay commission was one of the reasons for high inflation and subsequent slowdown in growth. “The prime minister has approved the composition of the 7th Central Pay Commission,” the Finance Ministry said in a statement. 

Besides the chairman, the commission will have one full-time member, one part-time member and a secretary.

Petroleum Secretary Vivek Rae will be full-time member, while director of the National Institute of Public Finance and Policy, Rathin Roy, will be part-time member. 

The four-member body will have a woman representative, with OSD in Expenditure Department Meena Agarwal being the secretary, said the statement.

Analysts also questioned the rationale behind setting up the panel three years in advance, when economic growth is at a decade-low and inflation the highest among BRICS nations. 

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