Wait for pay panel to continue

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Old 14-Jan-2016
Post Wait for pay panel to continue

With the “ballooning” salary and pension bill admittedly its biggest problem, cash-strapped Punjab has not made any move towards setting up of a new pay commission, the announcement for which was made by Chief Minister Parkash Singh Badal for 3.50 lakh employees more than a month back.
Punjab’s poor fiscal health has forced the state government to wait and watch before setting up the state’s Sixth Pay Commission. With the Government of India yet to accept the proposals of almost 20 per cent wage hike for its employees, as recommended by the Central Pay Commission, Punjab has decided to wait for the outcome.
The state is witnessing a period of slow revenue growth, “because of a negative economic sentiment”, even as its expenditure continues to grow by over 15 per cent annually. Almost 65 per cent of its total revenue receipts are used up in salaries and wages of employees and pensions and retirement benefits.
Finance Minister Parminder Singh Dhindsa admits that the state’s salary bill is too high, and any new hike would hit the state’s finances badly. “Each year, the salary bill increases by over Rs 3,000 crore as dearness allowance rises each year. Often, other states like Himachal Pradesh, that follow Punjab’s pattern of wage revision, complain that the salaries in the state are too high,” he says.
Of the Rs 46,229.24 crore that Punjab is expected to earn during this fiscal (though considering the current situation, the total revenue receipts will be less), Rs 25,536.35 crore is the state’s salary and pension bill alone.
Official sources say that the terms of reference of the Sixth Pay Commission will be made in a way that the percentage hike is minimal and wages will be brought at par with that of government employees in other states.
Officially, the line taken by Dhindsa is that they are yet to decide on the terms of reference of the wage commission. “The Cabinet has to collectively take the decision on who should be heading the Pay commission. But personally, I feel that the salary and wage bills alone take up the major chunk of our earnings, leaving very little room to carry on development activities,” he says.
Sources say that as and when the central pay commission recommendations are accepted by the Centre, the state will set up its own pay commission. “But the recommendations will take almost 14-18 months to come by, and the process to implement it would take a total of two years. So, the state government gets that breather for two years.”

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