The Hindu Business Line : ‘Income-tax, provident fund collection to go up by Rs 3,700 cr annually’

Ahmedabad, Aug. 14 With the UPA Government accepting recommendations of the Sixth Pay Commission for the Central Government employees on Thursday, the treasury collection by way of income-tax and provident fund would go up by around Rs 3,700 crore annually, a member of the panel said here.

However, two of the major recommendations of the Commission, which go beyond statistics, are an attempt to end the last relic of the British Raj and the outdated feudal system, the ‘peon culture’, and a psychologically reassuring job environment to the military personnel who can now look forward to a continued career in para-military forces after serving the armed forces, Prof Ravindra Dholakia, Member, Sixth Pay Commission, told Business Line here.

By recommending this ‘lateral transfer’ of military personnel to the para-military forces, the Government would save substantially on the cost of recruitment and training, besides other expenses involved.

“This would give tremendous benefit to the men-under-arms and be a good incentive to our youth to join the armed forces,” the noted economist, who teaches at the Indian Institute of Management-Ahmedabad, said.

He also expressed happiness that the Government had accepted the recommendation to increase the military service pay for the armed forces from the existing Rs 1,000 to up to Rs 6,000 a month, over and above their monthly salary, depending upon grades in the defence services.

An expert on macro-economics, public policy, public finance and labour economics, he had been a member of the State Finance Commission and the Public Enterprise Reforms Commission, set up by the Gujarat Government.

The Sixth Pay Commission, headed by Mr Justice B.N. Krishna, had submitted its report to the Centre in March 2008.

Prof Dholakia said the Commission has also recommended a complete upgradation of the Class IV employees into the Class III “with immediate effect”, provided these employees are at least matriculate.

In the case of non-matriculate ones, special training programme should be organised before their upgradation.

These employees comprise 25-30 per cent of the total workforce of about 50 lakh and their upgradation would benefit all.

“This would put an end to the relics of feudal system continuing in the Indian society and help homogenise the people further,” he said.

About the possible impact of the recommendations on income-tax and provident fund collection as a corollary to the hike in pay, he saidthe income tax collection, pegged at Rs 98,774 crore in 2007-08, is likely to go up by Rs.1,200 crore.

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