Inside Story: Why India’s most powerful bureaucrat lobby worried for its pay structure

 

Seventh pay commission is likely to submit its report on 19th of November. Reports are coming out that Central government employees and pensioners are likely to be disappointed as the Commission is expected to propose an approximate 15 per cent hike in salaries starting January 1, 2016. Last time in the 6th Pay Commission the average hike was around 35 percent.

As the news of possible hike in pay has come out, the section which feels most disappointed is India’s most powerful bureaucrat lobby. This has happened first time since the pay commission has started giving its recommendations to Finance Ministry.

Do you know why? The Answer is given by an allied service officer “It is the first time that a non-IAS, a Railway Accounts’ Service officer, is working as a secretary in the 7th Pay Commission. Before this, in the last six commissions, only IAS officers were appointed as Secretary Pay Commission. So they take care of demands and interests of their Cadre.” But this time as the possible structure of pay has come out through sources the clamor for hike and special treatment for IAS officers have been getting lauder and lauder. Meena Agarwal is the secretary of 7th Pay Commission and she is a Railway Accounts’ service officer. She will definitely look after interests of officers of allied services and not that of IAS officers” said the source further.

The recommendation, which will come into effect after getting a Cabinet nod, will impact 50 lakh central government employees and 54 lakh pensioners. “The 15 per cent salary hike likely to be recommended by the 7th Pay Commission will be much lower than the 35 percent hike employees got on the implementation of the 6th Pay Commission in 2008” said the source. A 15 per cent salary increase would push up the central government's salary bill by Rs 25,000 crore, which is 0.2 percent of India's GDP, according to Bank of America Merrill Lynch estimates.

 

This likely hikes in wages will boost the consumption-driven recovery in the domestic economy. Sales of affordable homes and consumer durables such as cars, two-wheelers and other electronic items are likely to pick up, said the analysts. However, salary hikes are also expected to stoke inflation and fiscal pressures. Pay Commissions are meant to review the salary structure of central government employees and are set up every 10 years.

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