The Hindu Business Line : Revenue picture unlikely to be distorted, says pay panel

New Delhi, March 24 The recommended salary increases by the Sixth Pay Commission are not likely to distort the Government’s revenue expenditure patterns.

The Commission in its report has said expenditure on pay and allowances and pensions constituted 22 per cent of the revenue expenditure in 1996-97 when the Fifth Pay Commission made its recommendation.

After the implementation of that commission’s report, the percentage increased to 27 per cent and has thereafter hovered around 21 per cent.

Receipts

In terms of revenue receipts, the averages for 2004-05 to 2006-07 shows that pay, allowances and pensions, including those for railways, comprised 28 per cent of the revenue receipts in 1996-97 and after implementation of the Fifth Pay Commission, this share increased to 38 per cent in 1998-99.

For assessing the Government’s capacity to pay, the Sixth Pay Commission worked out that the average ratio of expenditure on pay and allowances and pensions for civilian employees (excluding Railways) and defence forces to revenue receipts for 2005-06 and 2006-07 and applied it to the future years for determining notionally the manner in which pay and allowances and pensions are likely to grow if this ratio is maintained.

Specific proposals

These results have been compared with the projections based on the Commission’s recommendations on pay and allowances and pensions without taking into account the savings likely to accrue due to some specific recommendations made in the report.

“The comparison shows that after taking into account the additional financial implications, the ratio during the Eleventh Plan period is well below the average ratio for 2005-06 and 2006-07. Even after including the payment of arrears in 2008-09 and 2009-10, this position does not change,” the Commission has said in its report presented on Monday.

As such, in view of the revenue receipts expected in the future, the Central Government should be in a position to meet the additional expenditure consequent to the Commission’s recommendations, the report has said.

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