CPC report on 31 March 2008

Sixth Pay Commission will submit its report on 31st March 2008 as stated by Finance Minister P. Chidambaram in his Budget speech. He hoped that the pay commission report will fulfill the expactations of lacs of Central Government Employees.

He also proposed to change the Income Tax rate in view of the Sixth Pay Commission report. It will also benfit the employees. New rate of tax slabs are as follows:

1. 0 - 1.50 lac : Nill Tax (1.80 lac for woman)
2. 1.50 lac (1.80 lac for woman) to 3.00 lac : 10%
3. 3.00 lac to 5.00 lac : 20%
4. 5.00 and above : 30%

All eyes are on the Budget

Everybody is waiting to see the allocation of fund in this Budget towards additional liability to the Government for anticipated increase in the salary of Government employees after Sixth Pay Commission recommendations.

Earlier this week, the Railway Budget has made and ad hoc provision of Rs.5000/- crore for 2008-09 to meet the additional liability towards employees and pensioners in anticipation of the Pay Commission's recommendations.

Not much impact to State Governments

The Planning commission does not foresee any significant disruption on account of increase in salaries of state government employees.

'I don't think that this disruption is going to be all that cruicial,' Planning Commission Dy. Chairman Montek Singh Ahluwalia said to the Hindustant Times on the possible impact of the adoption of the Sixth Pay Commission award by state government.

Pointing out that blind adoption of the Pay Commission's award by the state government was not a good idea, Ahluwalia said Pay Commission were constituted once in 10 years and the states can do many things to neutralise the impact.

The government, he said was made to effect a big increase in salaries of its employees at the end of 10 years as the dearness allowance does not adequately take care of inflation. 'So at the end of 10 years, the government will be benefitting from a squeeze in real pay because the DA was never enough, so you have a big increase,' he said.

Report soon says TOI

The long wait of lakhs of central government officers and staff is about to end as the Sixth Pay Commission is expected to finalize its report ‘‘very soon,’’ well before its term ends on April 4.

Even before the pay panel submits its recommendations to the government, the first indication of what is in store for officialdom could be available in 10 days’ time when finance minister P Chidambaram makes his Budget speech. Since the employees’ fortunes are almost certain to be touched upon, the commission is keeping its recommendations a closely guarded secret, although speculation on the quantum of salary hike have ranged from a moderate 30% to a highly optimistic 165%.


Apart from his speech itself, the actual allocation by the finance minister under the head: salaries and pensions, may well be another indicator of what is in store for employees. But even before the February 29 Budget, the Rail Budget, commission sources said, could come as an eyeopener as well as the ‘‘profitmaking’’ railways is looking for ways to meet its expected salary and pension bill of Rs 9,000 crore in the light of possible salary changes and a tight-fisted finance ministry.

A pre-Budget meeting of the commission is being awaited and this could be scheduled to consequently enable the finance minister to make a mention of possible hikes for lakhs of employees, including those in defence and paramilitary forces. Sooner or later, the state governments across the country revise salary structures of their employees in accordance with what is accepted at the Centre.

Commission sources did not rule out a pre-Budget formal presentation before Chidambaram but added that the panel was ‘‘unlikely’’ to make a mention of any change in the present retirement age of 60 years.

‘‘There are two distinct processes — the commission recommending a salary structure and the government accepting the proposals. The commission has interacted with a large range of players, held wide-ranging meetings, received petitions and paid visits to different parts of the country. The outcome of this prolonged process would be reflected in the recommendations,’’ the sources said.

‘‘There are two distinct processes — the commission recommending a salary structure and the government accepting the proposals. The commission has interacted with a large range of players, held wide-ranging meetings, received petitions and paid visits to different parts of the country. The outcome of this prolonged process would be reflected in the recommendations,’’ the sources said.

Appeared in the Time of India, Delhi edition on 20/02/08

No equality in allowance with Centre in UP

UP Government said on wednesday in the Vidhan sabha that allowances of the State government employees can not be equal to the Central Government employee in UP. Therefore, the question of merging 50% of DA in the basic day does not arise. Finance Minister Mr. Lalji Verma in a written reply to question of Mr. Sudhir kumar of Samajawadi Party said that the economic condition of the state is not in position to bear this additional burden and hence HRA, CCA etc. can not given equal to the central government employees.

Financial Express estimates 150% hike in pay

A news article of the Financial Express predicts 150% hike in the salary of Government Employee by Sixth Pay Commission.

Fine points of the reports are :

• Pay Commission expected to submit its report next week.
• Basic salaries are likely to rise by over 150%
• Section officers will get a starting basic salary of Rs 20000, while their department heads, joint secretaries, would get a fixed basic salary of Rs 60000 a month.
• Secretaries to the government would earn a fixed salary of Rs 75000 a month. A cabinet secretary’s monthly salary would also be fixed at Rs 80000.
• Government officials will continue to retire at 60 years and will now retire on December 31 of the year they reach age 60.

The points seem same as earlier published by Dainik Jagran. You can read full article here.

Voice of a concerned Employee

This is a comment appeared in the post How much increase do you expect? It has raises some issues. So I thought this comment should be used in post to draw your attention as it reflects a concern voice from within Government employee circle.

If the pay is low, there are several reasons - low performance, low accountability and high corruption. I'm a Gr.B officer in the (infamous) Central Excise and Customs Dept. and my personal experience is that on an average almost 90% of employees in the service - from Gr.A to Gr.D, are corrupt i.e. they have accepted some kind of illegal monetary or other gratification at some points of their service life, influencing their working or affecting revenue collection. What is most worrisome are the attitude of the new IRS officers. In a recent batch of IRS officers only two among the 24 or so new recruits posted in my area has any sort of integrity. A few of them in fact openly cite the high investment they had to do in order to make to this grade, to justify their actions. Direct recruit Inspectors are no better with 99% of them resorting to corruption within 5 years of their joining.

The second problem is the lack of performance. It is well known that in the govt. sector, the person who works better is made to work more. Ultimately this results in some people getting away without doing any work while others are over burdened. This is mostly the problem in the cadres of Group B and below. Among the Group A officers this problem exists, albeit in a different manner because it does not affect the fellow Gr. A officers but those below him/her. It is said that Gr.A officers get salary for taking decisions because they are not supposed to work in the field level. Often many officers actually shy away from taking decisions - either by dilatory tactics or by making the junior officers put up proposals and only countersigning the same. In case of trouble I have seen many Gr.A officers escape responsibility saying that the lower rank officer misled them. Giving verbal directions to lower level officers and juniors is another way of shrugging off responsibility. Some of them take particular exception if a lower ranking officer subsequently try to get a written order. Gradually this adversely affects the sincere workers, who get the impression that they are being penalized for working hard, particularly since there is no effective carrot and stick policy for good/bad work.

As always, the level of accountability in a govt.organization is much less for all grades of officers compared to their private counterpart. The ACRs have ceased to be an effective instrument, except perhaps at the Gr.A level where it is often used for vindictive purposes.

All these issues prevent a govt. dept from performing at its optimum level. More officers are required to do the job which could have been done with much less. The lack of performance means delay in fulfilling the targets and the sincere workers getting dejected due to work pressure and lack of any effective system of accountability, rewarding a good performance and penalizing bad performance.

Similarly, although internally everyone knows who is an honest officer and who is not, there is no effective mechanism to give boost to honesty and punish the corrupt. The present system of passive vigilance administration has lost its edge due to its misuse or inertness. The overall depressing scenario and all pervading corruption has led to many once-honest officers resorting to corruption after working many years of service with integrity.

Thus, it is not only the pay structure that is needed to be improved. Nor will a sole emphasis on pay boost the performance in the government sector. Instead of a pay commission, there is need to set up a Government Services Reforms Commission to investigate and address the core problems and find a long term solution and the pay related issues could be one of the terms of reference of such a Commission.