Tuesday, March 11, 2008

Resource for implementing the Sixth Central Pay Commission recommendations

The article that came in Front line discuss the probable provision for implementing the Sixth Central Pay Commission recommendations.

Of course, the Sixth Central Pay Commission report is due and this would entail additional expenditure on the part of the government (which may also be why the government has kept some room for itself by pegging the fiscal deficit in the proposed Budget at only 2.5 per cent of the gross domestic product (GDP) instead of the 3 per cent permitted by the FRBM Act). But even if implementing the Pay Commission recommendations brings up the fiscal deficit to 3 per cent, the increase in capital expenditure would still have been only 8.8 per cent. Considering the fact that the Finance Minister’s tax proposals entail a net revenue loss of Rs.5,900 crore, entirely on account of indirect taxes, that is, having nothing to do with the income tax concessions he has given, it is clear that the underlying ideology of the Budget has been “tax less, spend even less”, the ideology of financial conservatism.

Source : Frontline
Discuss at Staff Corner -