Sixth Pay Commission arrears in instalments.

Prime Minister's Economic Advisory Council wants the government to pay its employees in phased manner and deposit part of the estimated arrear of 18,000 crore in their Provident Fund while implementing the Sixth Pay panel report to minimise its impact on inflation.

"Since the payment of arrears in cash could result in marginal rise in inflation rate due to spurt in demand for various products, EAC has said that government should consider depositing part of the arrears due to employees in provident fund and pay the remaining amount in a phased manner," official sources said.

The council headed by noted economist and former Reserve Bank Governor C Rangarajan, is of the opinion that the payment of arrears in one go could result in further rise in prices, especially of manufactured goods and consumer products.

"The government had paid the arrears in a phased manner while implementing the report of previous Pay Commissions, so it can consider it again," Rangarajan had earlier said.

The council, which advises Prime Minister Manmohan Singh on important economic matters, had earlier said the inflation rate could come down to 5 to 5.5 per cent after about four months following good monsoon and measures taken by the government.

Inflation, however, has already crossed 8 per cent mark, and the analysts fear that it could soon touch 10 per cent mark if the hike in international crude oil prices is partly passed on to the consumers.

The Sixth Pay Commission headed by Justice B N Srikrishna, which submitted its report in March, has recommended an average 28 per cent hike in salaries of about 40 lakh central government employees with effect from January 1, 2006.

It estimated that hike in salaries would cost about Rs 12,000 crore annually, while the payment of arrears would put an additional one time burden of Rs 18,060 crore to the exchequer.

The Union Cabinet, which considered the pay panel report last month, forwarded it to a committee of Secretaries headed by Cabinet Secretary K M Chandershekhar, following protest by sections of government employees who are not happy with the recommendations.

6th pay scale is likely to come into force on June 1, 2008 in Goa

Finance Minister of Goa Dayanand Narvekar told TOI, "the government is not in a position to raise the pay scales of the government employees to bring about parity. We have to make provision for the 6th pay commission which is likely to come into force on June 1, 2008."

Goa is facing trouble for Rs 800 crore for sixth pay commission recommended pay scale implementation.

The government has assured to finalise the "parity issue" with the employees association positively by May 25. "Based on their assurance, we have suspended our agitation. Or else, we will strike," Shetkar said.

We are expecting around Rs 100-crore from the mining cess. For the additional amount, government might have to take loans or raise taxes or even divest money from other portfolios, which means cutting down on developmental works."Narvekar said.
see the full report here:
http://timesofindia.indiatimes.com/Goa/Financial_time_bomb/articleshow/3044767.cms

Sixth Pay Commission-The Long Wait

Central Govt employees have been waiting patiently for the 6th CPC to submit its report. Now that the report has been submitted, they are in a confusion as to when and how it will be implemented. Armed forces and IPS have objected strongly to the recommendation which they say is favourable for IAS while discriminating other services. Somehow the commission has got the idea that by rewarding few IAS officers the entire govt machinery is going to be revitalised. Far from that, such a move is going to demoralise other officers and lead to more attrition and corruption among those remaining in service. The Govt cannot hope to compete with the private sector in terms of salaries and benefits and considering the fact that the remuneration of Govt employees is going to remain the same for the next decade until the 7th pay commission is implemented, its a very delicate situation. While living standards of those working in the private sector is improving day by day, Govt employees find that they are being pushed into a corner. With such a huge population, our country may not find it difficult to fill up vacant posts in Govt offices, but this would be at the expense of talent, merit and performance.
Now that inflation has reared its ugly head, and Left parties pressurising the Govt on many issues, it would be left with no other option than to placate Govt employees before the next elections. The trend in Karnataka and other states indicate that the Congress is losing ground. Hence it can be expected from the ruling party to implement the 6th CPC in August-September 2008.