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Sixth Pay Commission impact on consumption

Sixth Pay Commission impact on consumption
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First Published: Thu, Mar 27 2008. 07 54 AM IST
Updated: Tue, Aug 19 2008. 04 10 PM IST
New Delhi: The big question following the announcement of sixth pay commission recommendation was that would it lead to an increase in consumption? Economists remain positive that this is a distinctly possible. With state governments likely to follow footsteps of the central government, money in the hands of government employees will see a surge. Those who stand to gain from it include FMCG companies, makers of consumer durables and automobiles. But this is not likely to add to inflation. According to economists, the rise in price has been primarily due to supply side constraints. So, they argue that increased spending is not likely to add to inflation.
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First Published: Thu, Mar 27 2008. 07 54 AM IST