With the Lok Sabha elections fast approaching, the United Progressive Alliance (UPA) government, on Tuesday, constituted the Seventh Central Pay Commission.
The commission’s recommendations are expected to benefit 35 lakh Central government employees.
The commission, to be headed by the retired Supreme Court judge Ashok Kumar Mathur, will submit its report in 19 months and its recommendations will be effective from January 2016.
The commission’s full-time member will be Petroleum and Natural Gas Secretary Vivek Rae and part-time member will be Rathin Roy, Director, National Institute of Public Finance and Policy.
Prime Minister Manmohan Singh had in September 2013 approved the Pay Commission. The award of the Sixth Pay Commission, set up by the first UPA government, had resulted in an additional outgo of Rs. 12,561 crore in 2008-09.
The Eleventh Finance Commission had categorically said that pay commissions need not be set up routinely as their awards had a cascading effect on the finances of State governments.
The Economic Survey for 2013-14 says the Centre’s expenditure as a percentage of the Gross Domestic Product (GDP) on pay and allowances for its employees rose from 0.9 per cent in 2007-08 to 1.4 per cent in 2009-10 after the Sixth Pay Commission’s recommendations were implemented. The data available show that the Budget estimate for 2011-12 is 1.1 per cent of the GDP.
Similarly, the Centre’s expenditure on pensions went up from 0.5 per cent of the GDP in 2007-08 to 0.9 per cent in 2009-10 and 0.6 per cent in 2011-12.
