Sixth Pay Commission Recommendations and Implementation

6PC recommendations and implementation.

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The sixth pay commission recommendations have been implemented with some positive (for the employees) revisions. The average pay hike (all included) is 21 %, and with effect from 1-1-2006. The pay arrears also are being paid (40% this year and 60% next year). Over 5 million government employees are benefited by this.

Reports say that , ten years ago, when the fifth pay commission was implemented, it gave rise to a heavy debt burden on the Government. Then, the World Bank , commented that “this is the single-largest adverse shock” to government finances and Indian economy. This resulted in soaring Budget deficits for the Central and State Governments. The extra financial load was over 9% of the non-plan revenue expenditure.

This was a major concern when the 6^th PC was setup. However, Government is not feeling any brunt now, for having implemented the recommendations (with upward revisions included). The economy has changed over the last few years, and Government budgets are in much better shape as compared to those 90s. Government is in a position to pay high to its employees. With the present hike , the load is about 3.3% of the budgeted non-plan revenue expenditure only. That means , its quite comfortable for the Government to pay the “huge” salaries to its employees.

Pay Commission did not forget the poor taxpayers and the ‘aam admi’. They did say that improving the system efficiency is a must. That’s why they recommended many Administrative reforms. Though the Government was keen to implement the pay revisions, nothing seems to be taken up towards any administrative reforms.

The common man is almost sure that higher wages won’t result in any improvement in efficiency. Studies show that the Govt employees themselves don’t believe that higher pay would result any improvement at all. So, something different should be done for the reforms. For the ‘aam aadmi’, the huge pay hike would result in ‘higher disparity’ between the common man and the ‘blessed babus’. The gap widens, without any benefits to the common man and the tax payers.

Another comment in the media says that the whole lot of money paid (windfall gains !) to the employees would result in a boost for the ‘home improvement’ and ‘consumer durables’ sectors. And probably, that’s the only positive change that brings to the public at large. A media report says : “ While pay revisions are necessary, it is important to raise the perception in the society that the Government is an asset, not a constraint, towards a better future”.