Sunday, October 21, 2007

Election on the horizon. What does it mean?

With the stand off between the UPA and the Left continuing, the political parties have begun the preparations for the elections to the parliament. The question is how the situation help employees. In general the elections are not in national interest. It will cost a lot to the exchequer.

But the election mean a lot of hope to the government employees who are expecting the sixth pay commission report. In India, an impending election is nearly always a trigger for populist fiscal spending. And considering the huge size of employees - 3.3 million and their dependents, its not easy to ignore the demands made by them.

"Early elections could even prompt announcement of some recommendations ahead of schedule," JP Morgan economists wrote in a note last week on sixth pay commission.

Party sources have already said the government had instructed the Sixth Pay Commission to expedite the process of finalising increased salaries and allowances for the 3.3 million central government employees by December.The announcement was originally to be made by April next year. And it is expected the government will to woo the voters.

The center has already started rolling out the sops. The limits for the bonus eligibility has been raised. Those with salaries up to Rs 10,000 will be eligible for bonus, as will countless construction workers who do not have the right to such payouts. The cabinet on October 1 cleared amendments to the Payment of Bonus Act, 1965, to bring more workers into the bonus fold, extending the law to a part of the unorganised sector by including those involved in construction.