7TH CPC WILL INCREASE CENTRAL GOVERNMENT PAY ONLY BY 15%.

Honourable Finance Minister Shri.Arun Jaitely had spoken about the possible impact of 7th CPC recommendations in Parliament.

The Speech is critically reviewed by Comrade Elangovan of DREU.

1.     The Medium Term Expenditure Framework statement has not yet been uploaded in Finance Ministry’s website.However I have taken the figures provided by print media including The Hindu.As per their statement the expenditure on salaries will rise by 9.56% in the fiscal 2015-16 as a result of 7th CPC implementation over the normal estimated expenditure in the 2015-16 budget to Rs.100619 crores. This means that the expenditure projected was Rs.91,839cr which if increased by 9.56% becomes Rs.100619 crores.

2.     While going through the earlier framework statements I have come to the conclusion that the ‘salaries’ shown is pay with normal increments plus DA projected.

3.     As per the estimated strength and provision there of statement laid as part of finance budget,the normal projection as PAY was Rs.60731 cr and so DA is Rs 31,108 as deducted from Rs 91 839 cr. The budget document does not give the DA expenditure separately. It gives the total expenditure on all allowances. I have therefore arrived at the figure based on calculations. However I have sought the expenditure on DA, HRA, and Transport Allowance separately through RTI.

4.     The increase proposed is Rs.100619 cr from Rs.91,839cr  which means that there will be an increase of Rs.8780 cr. There won’t be any DA after 1-1-2016 up to 31-3-2016 in the fiscal 2015-16. Therefore the whole increase is on basic pay in this fiscal.

5.     As we have already seen that the basic pay is Rs.60731 cr. the increase of Rs.8780 cr. is over this Rs.60731.This increase is 14.45% only.The expenditure projected for 2016-17 is Rs.1,12,000cr which is Rs.11,400 more over 2015-16 which works out to 11.32%. This is due to Increment, DA,HRA, TRA etc.The projection for 2017-18 is 1,16,000 cr.

6.     If 40%  of Basic Pay is to be given,the increase of expenditure in the fiscal 2015-16  must  be Rs. 24000 cr as against the Rs. 8780 cr. The demand of JCM Staff side is that there must be an increase of 371% of basic pay as on 1-1-2016. With the 119% DA we would be drawing 219% already. The real increase demanded is 152% of Basic Pay.So not the 152% or 40% of 5th and 6th CPC is intended to be given to us. Only around 15% is going to be given.As The Terms Of Reference of 7TH CPC directs them to recommend only what is‘FEASIBLE AND DESIRABLE’ to the Government.Now the Government In Parliament states only 15% is FEASIBLE AND DESIRABLE. ARE WE TO ACCEPT IT.? Some PSUs got 15%. But that is for 5 years. But for Central Government Employees it is for Ten Years.Are We To Accept?

7.     Pension expenditure for civilian pensioners was estimated to be Rs.27,145cr and defence pension Rs.54,500 cr. The total is Rs.81645 cr. This is expected to go up to Rs.88521 cr, which is an increase of Rs.6876 cr.As there will be no Dearness Relief for the fiscal 2015-16 the increase is to be accounted only to Basic Pension.

8.     I have sought the expenditure break up for dearness relief under RTI. However the rough calculation shows a near increase of same 15% in Pension.

9.     The impact of 6th CPC on expenditure as per estimated strength of establishment and provision there of in respect of Central Government civilian employees was as follows:

ARREARS Rs 26084 cr.  For three  years mostly on Pay and DA regular PAY Increase per annum:   Rs 8685 cr.  These are actual figures. The 219% of Rs. 8685 cris  Rs.19000 cr.  EVEN THIS IS NOT GIVEN.

10.We must issue a warning to the government afresh demanding acceptance of our demand.I recall my earlier note where in I had quoted BibekDebroy’s report that the 7th CPC will not be that destabilising to the Government as that of 6th CPC. GOVERNMENT PROVES THAT.