Pay panel for Govt employees to hit pvt sector; SMEs to get squeezed
Updated: Sep 25, 2013 03:09:10pm
New Delhi, Sept 25 (KNN) In a move that will have a crippling cascading impact on the private sector wages, particularly for small and medium firms, the government today approved the constitution of the seventh Central Pay Commission which will recommend revision in salaries of about four million employees of the Central government from January, 2016.
“The Prime Minister Manmohan Singh has approved the constitution of the seventh Central Pay Commission,” said Finance Minister P Chidambaram here.
The names of the chairperson, members as well as the terms of reference of the seventh Pay Commission will be finalised and announced shortly after consultation with major stakeholders.
The Centre’s decision will also force the state governments to go in for a similar competitive move raising the salary bill of the government sector. The decision comes at a time when the government is grappling to control expenditure and check the fiscal deficit. It also coincides with the slowdown in the economy which is battling demand compression and high inflation.
Several industry chambers, including the Federation of Indian Micro, Small and Medium Enterprises (FISME) are worried about the constitution of the next Pay Commission stating several state governments have yet not been able to absorb the burden of the previous pay revision of their employees.
“Our apprehension is that it will increase the cost of doing business in India and make us a high cost economy; and that will have an impact on competitiveness,”Federation of Indian Micro and Small & Medium Enterprises (FISME) said .
FISME also said, “Salaries, perks and retirement benefits of government servants are sky rocketing. In a country where an engineer in the private sector would be earning 30 K or so towards the end of his career, an engineer in government would be drawing a pension of 40 K after retirement plus other perks after having enjoyed in active service large pay checks, unlimited perks, prestige, power, secured tenure and promotions and almost no accountability.”
More importantly, pay revision in the government sector will lead to a revision of wages and salaries in the private sector making the economy high cost. The moot point is whether the industry can afford it? (KNN/Gunja/PC)
“The Prime Minister Manmohan Singh has approved the constitution of the seventh Central Pay Commission,” said Finance Minister P Chidambaram here.
The names of the chairperson, members as well as the terms of reference of the seventh Pay Commission will be finalised and announced shortly after consultation with major stakeholders.
The Centre’s decision will also force the state governments to go in for a similar competitive move raising the salary bill of the government sector. The decision comes at a time when the government is grappling to control expenditure and check the fiscal deficit. It also coincides with the slowdown in the economy which is battling demand compression and high inflation.
Several industry chambers, including the Federation of Indian Micro, Small and Medium Enterprises (FISME) are worried about the constitution of the next Pay Commission stating several state governments have yet not been able to absorb the burden of the previous pay revision of their employees.
“Our apprehension is that it will increase the cost of doing business in India and make us a high cost economy; and that will have an impact on competitiveness,”Federation of Indian Micro and Small & Medium Enterprises (FISME) said .
FISME also said, “Salaries, perks and retirement benefits of government servants are sky rocketing. In a country where an engineer in the private sector would be earning 30 K or so towards the end of his career, an engineer in government would be drawing a pension of 40 K after retirement plus other perks after having enjoyed in active service large pay checks, unlimited perks, prestige, power, secured tenure and promotions and almost no accountability.”
More importantly, pay revision in the government sector will lead to a revision of wages and salaries in the private sector making the economy high cost. The moot point is whether the industry can afford it? (KNN/Gunja/PC)
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