Date:21/07/2006 URL: http://www.thehindubusinessline.com/2006/07/21/stories/2006072104320100.htm

Back Cabinet okays 6th Pay Commission

Our Bureau

Panel to consider interim relief

Ministry declaration
For 3.3 million Central Govt staff with a time frame of 18 months to submit its recommendations.
Not to hurt the fiscal situation and should not cause any apprehension among foreign investors.
Wage burden to be reasonable, appropriate and affordable and in consonance with modern requirements.

New Delhi , July 20

The Union Cabinet on Thursday approved the setting up of the Sixth Pay Commission for nearly 3.3 million Central Government employees with an outer time frame of 18 months to submit its recommendations.

It will also consider whether any interim relief is to be granted to the employees.

Panel members

The Commission will comprise one Chairman in the rank of a Minister of State, one part-time member and one member-secretary in the rank of Secretary and Additional Secretary, respectively.

The Central Government employees have demanded a new pay commission since the Fifth Pay Commission was set up 12 years ago in April 1994 and submitted its report in January 1997. That commission had recommended a substantial step up in salaries and its financial impact on an annual basis was estimated at Rs 17,000 crore.

The then Government had, however, not implemented a host of other recommendations of the Fifth Pay Commission, which included a phased reduction in staff strength and fewer holidays in a year.

Impact on States

The impact of the Fifth Pay Commission went beyond the Centre as almost immediately the State Governments faced pressures from their employees for parity in wages. Consequently, State finances came under severe strain and it took nearly five years for them to recover from the impact.

The Prime Minister, Dr Manmohan Singh, had said on an earlier occasion that setting up the Sixth Pay Commission would not hurt the fiscal situation and should not cause any apprehension among foreign investors.