NEW DELHI : The Centre on Thursday constituted the Sixth Pay Commission headed by Justice B.N. Srikrishna, to recommend the principles and guidelines for revision of wages of about 33 lakh Central Government employees.

The four-member Commission, to be headquartered in the capital, is to submit its report within 18 months, a notification issued by the Department of Expenditure (DEA) in the Ministry of Finance here said.

The other three members of the panel are Ravindra Dholakia, J.S. Mathur and Sushama Nath who is to function as Member-Secretary.

The Commission, besides looking into the pay structure, allowances and other benefits of the Central staff, has also been directed to recommend new pay structures for personnel of the armed forces and officers and employees of regulatory bodies set up under Acts of Parliament.

The Commission will also look into the desirability and need to sanction interim relief, if any, till the time its recommendations are submitted and accepted by the Government.

Under its terms of reference, the Commission is to make recommendations for pension and gratuity for employees appointed prior to January 1, 2004, as those recruited after this date are covered under the defined contributory pension scheme.

Productivity-linked incentive

The Commission is also expected to make recommendations on the payment of bonus as well as the feasibility of introducing a productivity-linked incentive scheme. Above all, the panel has been entrusted with the task of suggesting the ways and means of transforming Central Government organisations into entities, which may be seen as modern, professional and citizen-friendly.

Additional burden

The general expectation is that the revised pay structure will cast an additional burden of at least Rs. 20,000 crore annually on the Central exchequer.

The guesstimate stems from the fact that the Fifth Pay Commission recommendations implemented in 1996-97 cost the exchequer an additional Rs. 17,000 crores annually. Besides, it put such a heavy burden on the States that the Finance Minister was forced to formulate a financial package to bail them out.

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