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Showing posts from November, 2007

Heard on Street : Sixth pay commission report by Jan 1st week

It is heard that the sixth pay commission will submit its report before January first week. The government wants to implement the recommendations before April. The recommendations of the commission is likely to be same as published here. There are also recommendations to retain professional talent. The government is also decided on increasing the retirement age. But this is not under the scope of the pay commission.

Sixth pay commission should take into account inflation

Expressing the view that the present salaries of the Railway employees were not commensurate with inflation, the Southern Railway Mazdoor Union has sought interim relief. In a release here, the Divisional secretary of the Union R.Kesavan said the Sixth Pay Commission should take into account inflation while formulating the recommendations. "The railway employees should be paid on par with the other Public sector undertakings," he said. The recommendations of the commission was likely to be released by April next, he said and demanded that they be implemented immediaetly,failing which they would be forced to resort to agitations, he said.

Indian Railwaymen seeks four-fold increase in the emoluments

The National Federation of Indian Railwaymen (NFIR) will soon chalk out an action plan to achieve its primary demand of a four-fold increase in the emoluments of the estimated 14-lakh workforce by the proposed Sixth Pay Commission. M. Raghavaiah, NFIR general secretary, was speaking to presspersons on Friday after addressing a meeting of employees in connection with the first-ever ‘secret ballot’ of recognised trade unions in the history of railways. The elections will be held from November 26 to 28 in the 16 zones of the railways. Over 13.5 lakh employees will cast their votes. While the main contestants are NFIR and All-India Railwaymen Federation (AIFR), any union that gets 30 per cent of the votes will be declared as ‘recognised’. Mr. Raghavaiah, who is also general secretary of SCR Employees’ Sangh, justified the demand saying a working day of a railway employee was uncomparable with any other job. “About 60 per cent of railway employees work in places that are far away from h…

Retire at 62, counter pension liability

If implemented, the central government's proposal to hike the age of retirement of its employees from 60 to 62 will defer by two years its pension liabilities of around Rs 14,749 crore (Rs 147.49 billion), according to the Invest India Economic Foundation (IIEF). At the same time, the salary burden on account of the 1,70,000 employees whose retirement will be deferred immediately by two years will be to the tune of Rs 9,784 crore (Rs 97.84 billion) for the two-year period. This includes increments and indexation for future dearness allowance. The calculation, based on data from Invest India Market Solutions (the consulting practice of the IIEF), assumes an average monthly salary of Rs 21,800 under the forthcoming Sixth Pay Commission. The central government had estimated 3,321,210 employees (excluding defence personnel) on its rolls in 2007, with the number projected to go up marginally to 3,329,682 in 2008. According to the Budget estimate for the current fiscal, the total outgo…

Debate on for Unified Civil Service

There is no unanimity between different Group-A central services and associations representing the All India Service officers (IAS/IPS) on whether a Unified Civil Service will suit India better.The Sixth Central Pay Commission had sought response from different services on the case for a unified civil service by merging all Central (both technical and non-technical) and All India Services and whether there should be two distinct streams, one embracing all technical services and another for non-technical services. The Indian Revenue Service (Customs and Central Excise) and the Indian Information Service associations supported the idea of unified civil services.The IRS (C&CE) in its memorandum submitted to the Sixth Pay Commission has said "The recommendations of the IRS (C&CE) is to request the Pay Commission to recommend to constitute a Unified Civil Services pool or an Integrated Management Pool, by empanelling officers from various participating Group 'A' servic…

Increasing retirement age to 62 : A thought on it

The move to increase the retirement age of government employees from 60 to 62 years, as reported in this newspaper yesterday, can be endorsed on many counts. The average Indian's life expectancy at birth has gone up to over 66 years for men and 71 years for women. The last decision to increase the retirement age of government employees, to 60 years, was taken in 1998, when life expectancy for the average Indian was 63 years. Another increase in the retirement age now, on grounds of improved life expectancy, is therefore quite logical. There is also a social reason for postponing the age of retirement: as youngsters study for more years, they are dependent on their parents for far longer than used to be the case. Many family budgets get strained today because the main breadwinner retires before the next generation is settled in life. The global practice also argues in favour of an upward revision in the retirement age. Several developed and developing countries have raised the ret…

Govt finalising proposal to raise the retirement age to 62

Ten million govt officials, besides defence personnel, to benefit. In a move that will benefit over 10 million central and state government employees, besides those in the defence services, the ministry of personnel is finalising a proposal to raise the retirement age of central government officials from 60 to 62 years. If approved by the Cabinet, this will be the second time in nine years that the retirement age will be raised. "Those who support the proposal feel it should be implemented in order to retain the collective experience. But there are people who say more young people shuld be brought into government services. We are discussing the matter," minister of state for personnel Suresh Pachauri told Business Standard. He declined to specify when the proposal would come before the Cabinet. In 1998, the retirement age was raised from 58 years to 60, principally as a means of easing pension payments caused by a hefty increase in government salaries on the lines of the F…

Top retired army man suggests pay hike

With the Sixth Pay Commission working on its recommendations, a top former army officer has made a strong case for a 'generous' pay hike to defence personnel saying their turbulent lifestyle, limited career prospects and possibility of loss of life or limb should be taken into account for the purpose. Maintaining that the average number of army men killed annually in active operations was 415 'when no war is being waged', former Vice Chief of Army Staff Lt Gen Vijay Oberoi said almost 5,000 personnel were invalidated on medical grounds every year due to stringent physical standards. Observing that Indian Army had heavy counter-insurgency and counter-terrorism commitments, he said the average length of service of soldiers in such operations amounted to 10.87 years, compared with those in Western nations where it is not more than one year. "Even those who volunteer for additional duties in some western countries do so for a maximum of two to three years throughou…

Scrap Fiscal Act Target to compensate revenue defict by Sixth Pay Commission implementation

The Planning Commission, in its 11th Plan (2007-12) draft, has urged
side-stepping the zero-revenue deficit aim by 2009 that is mandated by
the Fiscal Responsibility and Budget Management (FRBM) Act. The 11th
Plan draft document, which was recently approved by the full Planning
Commission, held that maintaining zero-revenue deficit will
substantially limit the government''s ability to fund flagship
schemes. Finance Minister P Chidambaram has made it clear that the
government is bound by the FRBM Act, 2003, which mandates it to cut
the revenue deficit by a minimum of 0.5 percentage points every year.
In 2006-07, the Centre''s revenue deficit stood at 2 per cent of the
gross domestic product. The government has to eliminate this by March
2009. A zero-revenue deficit can restrict expenditure on health and
education, which creates human capital.Revenue deficit is the difference between revenue expenditure and
revenue receipts. The Prime Minister''s Economic Advisory Council, in

Sixth Pay Commission will not recommend raising retirement age.

The Sixth Pay Commission for central government employees will not recommend raising the retirement age. "No," finance minister P. Chidambaram said today when asked whether the age, now at 60 years, would be increased.The minister, speaking at a conference of economic editors today, said the commission's report would be handed in by April. Former Supreme Court judge B.N. Srikrishna, who authored the report on the 1993 communal riots in Mumbai, is heading the pay commission. The blow to hopes of a higher retirement age comes days after Planning Commission deputy chairman Montek Singh Ahluwalia argued against revision of salaries by the commission. "There is no case for a pay increase now because erosion of income (because of inflation) is taken care of by indexation (dearness allowance)," Ahluwalia had said.Earlier, the Eleventh Plan (2007-12) document had warned of problems for government finances if the pay hikes were not capped. "With the commission'…

S&T and R&D to be liberalised ?

Planning Commission has admitted that India's investment in R&D remains far below the level required for a country aspiring to emerge as an economic and knowledge superpower. The draft of 11th Plan,likely to be put for National Development Council's approval early next month, also stresses upon the promotion of basic research in science, engineering and medicine as a "critical input" for development. "To promote basic science research in academic and research institutions, there is need of a well-defined focussed approach for building an infrastructure of equipment, facilities in colleges/universities/institutions," says the draft in its chapter 'Innovation and Technology'. Mere investments, the plan panel asserts, would help only partially and there is also a need to increase the efficiency of the delivery system so that resources are made available to R&D groups much faster. It has also called for a "mechanism" which would fo…

No reason to raise pay of govt employees: Panel

The Planning Commission sees no reason to increase the salary of government employees as it feels that wages are already linked to price rise. "There is no case for pay increase (of government employees) because erosion of income is taken care of by indexation," panel's Deputy Chairman Montek Singh Ahluwalia told reporters after the end of the full plan panel meet. "With the Sixth Pay Commission's impact looming large, hard-won gains (on fiscal front) could easily be jeopardised," according to the draft Eleventh Plan document approved by the the Commission. Pointing out that the Pay Commissions were relevant earlier when a large portion of the salary was not indexed, Ahluwalia said the sixth pay panel would take into account the fiscal circumstances while making its recommendations, likely sometime in April next year. The document further stressed it is imperative that utmost vigilance be maintained against any deterioration in the fiscal situation.

Retirement Age

There were rumors in same news papers the the retirement age to be increased to 62 as per the recommendations of the sixth pay  commission. This assumptions was made on the basis of extension of services of space and atomic energy chairmen. However it is learnt the commission does not wish to propose the change of retirement age from the existing 60. Also it is difficult to think that the the government will take a positive step von this ignoring the opposition from the left. However the retirement date will be unified to December 31st. That means an effective increment of of one year for those whose date of birth falls in January. Also the sixth pay commission is planning for an option of re-employment - to utilize the service of experienced professionals. But this will not be an detention of service, rather it will be like a contact.

Performance linked pay. What does it mean?

In his interview Hon'ble Justice Sri Krishna hinted about the performance linked incentives to the central government employees in the sixth pay commission recommendation. It is neither appropriate nor desirable to introduce such a thing. It will give chance to 'chamchagiri' and create a lot of heart burn. Earlier in one of the autonomous scientific organizations such a scheme called "Merit Promotion" was introduced but later withdrawn. Let us hope that the Commission will not provide any loopholes for the employers (superiors) to use more powers at their whims and fancies. The CRs itself is a waste and if we introduce another angle to it, it will create even more problems.

Maharashtra to implement Sixth Pay Commission recommendations without much fuss and delay

It is good news for two million employees of the Maharashtra government as senior officials of the state government have indicated that the state will implement the recommendations of the Sixth Pay Commission without much fuss and delay. But, this means the state exchequer takes a hit of around Rs 4,000 crore to Rs 5,000 crore.
The confidence of senior state government officials arose from the booming economy and buoyancy in the tax revenues who had a horrid time while managing the state’s finances at the time of the implementation of the Fifth Pay Commission report.
Earlier this week by going on a one-day token strike, by both the Centre and state government employees, for implementation of the Sixth Pay Commission recommendations, unions have managed to bring the issue to the fore.
With the shadow of the mid-term poll looming large over the Centre, it is expected that the announcement of the acceptance of pay commission’s recommendations by the Centre will be done sooner than later.…

Sixth Pay Commission : Does Govt have money for implementation?

The government of India is a big gainer from the surge in the Sensex. The gains are sufficiently large to take care of the potential impact on the exchequer of the recommendations of the Sixth Pay Commission. In conceptual, if not in practical terms, the government is sitting pretty. The market capitalisation of 29 listed PSUs has soared from Rs 2,34,000 crore on June 1, 2004, shortly after the UPA government took over, to Rs 10,90,000 crore on October 24, 2007. The current value of the government’s shareholding in these PSUs works out to a colossal Rs 8,80,000 crore — enough to wipe out a quarter of the total public debt. A mere 10% sale of its portfolio would fetch the government over Rs 88,000 crore. That is around 2% of GDP, more than adequate to cover the immediate impact of the Sixth Pay Commission on GDP, which is expected to be of the order of 1% of GDP. It is the impact of any wage award in the initial two or three years that is lethal. Over time, as nominal GDP rises at ar…