BackGovernment names Ashok Kumar Mathur as 7th Pay Commission head
Vivek Rae, secretary of the ministry of petroleum and natural gas, will be a full-time member of the Commission
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New Delhi: In a largesse to government employees ahead of general elections that are due by May, the Congress party-led United Progressive Alliance (UPA) government on Tuesday formally constituted the Seventh Central Pay Commission.
While the constitution of the commission promises significant increases in pay for government employees during an election year, it could significantly increase the future fiscal burden of the central and state governments. Implementation of the Sixth Pay Commission increased salaries by 21% resulting in an additional annual outgo of nearly ₹ 18,000 crore for the Union government, besides a pay out of arrears of ₹ 30,000 crore.
It will be headed by Ashok Kumar Mathur, a retired Supreme Court judge and retired chairman of Armed Forces Tribunal and will revise the salary structure of five million central government employees, including those in defence and railways and about three million pensioners.
Vivek Rae, secretary in the ministry of petroleum and natural gas, will be a full-time member of the commission, while Rathin Roy, director of the National Institute of Public Finance and Policy (NIPFP), will be a part-time member. Meena Agarwal, officer on special duty in the department of expenditure, will be the secretary of the commission.
The finance ministry had approved constitution of the pay commission in September last year ahead of state elections in five states. In a statement, the finance ministry had said the average time taken by a pay commission to submit its recommendations is about two years, and accordingly the next set of recommendations is likely to be implemented from 1 January 2016.
Though the terms of reference of the commission are yet to be notified, one of the appointed officials of the commission, speaking on condition of anonymity, said the key challenge is to make sure that government salaries reflect productivity and performance within fiscal constraints. The official said the terms of reference of the commission are expected to be notified in a day or two.
The inflationary situation in the country has worsened since the implementation of the Sixth Pay Commission, said N.R. Bhanumurthy, professor at the NIPFP.
“Though it could be coincidental, but in my view it would have got aggravated by the pay hikes recommended by the commission. With the background of the impact of the Sixth Pay Commission on the fiscal and inflationary situation, the Seventh Pay Commission really needs to follow a middle path of trying to address both the fiscal concern and the rising cost of living," he said.
The Sixth Pay Commission, headed by justice B.N. Srikrishna, was constituted on 5 October 2006. It submitted its report on 24 March 2008, but its recommendations were implemented retrospectively from 1 January 2006. The report led to a 6 percentage points increase in dearness allowance for central government employees from 16% to 22%.
R. Srinivasan, general secretary of the Indian National Defence Workers Federation, said the Seventh Pay Commission needs to settle the anomalies that have arisen due to the implementation of the previous pay commission such as the concept of pay band instead of pay scales for the defence personnel. “We have demanded equality between pay hikes for lower grade and higher grade employees and more specific cadre progression. We have also asked to include one labour representative in the commission," he said.
Srinivasan said various defence employees federations, which include civilian defence employees, have decided to go on indefinite strike from 17 February to demand merger of dearness allowance with basic salary, among other issues.
Though the government accepted most of the recommendations of the Sixth Pay Commission with some modifications, it rejected a few recommendations such as a liberal severance package for employees who want to leave service without pension with 15-20 years of service left, another one that said government employees should have only three holidays in a year, and a suggestion for flexible work hours for women and flexi-weeks for employees with disabilities.
The government also deferred some recommendations to review them separately, such as bonus and overtime allowance, recommendation of lateral shift of defence personnel to central paramilitary forces, corporatization of the Indian Railways, and abolition of Indian Telecom Services and Telecom Commission.
The First Pay Commission was established in 1956, and since then the Union government usually appoints a pay commission once in a decade to revise the wages of Union government employees.
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