Government expenditurer on CG employees and actual impact on government finances

Comrades,

          There are various reports in the media about the impact of the 7^th CPC recommendations on the common man and the government resources at large, the reports suggest that additional amount of    Rs  one lakh crores of public money has been spent for implementation of the 7^th CPC recommendations for 35 lakhs central Government employees, Perhaps the strongest criticism of Pay Commission awards is that they play havoc with government finances and also  state government demand support to implement the 7^th CPC recommendations. At the aggregate level, these concerns are somewhat exaggerated and which is totally wrong.

Let us examine the 7^th CPC report vide para no 3.65 and 3.66 and the website of Government of India Ministry of Finance Department of Expenditure Pay Research Unit for Brochure on Pay and Allowances of Central Government Civilian Employees visit website : http://finmin.nic.in/pru/BROCHURE/PayAllowance2013-14E.pdf

The 7^th CPC report para number 3.65 and 3.66

3.65 The total expenditure on pay and allowances for civil personnel of Central Government in the recent years is brought out in Table 9.

Table 9: Expenditure on Pay and Allowances

Year	2007-08	2008-09	2009-10	2010-11	2011-12	2012-13
Amount(Rs crore )	51,664 80	80,110	1,07,402	1,07,550	1,17,565	1,29,599
As a percent of GDP	1.04	1.42	1.66	1.38	1.33	1.30

The Commission has obtained details of expenditure from each ministry/department for up to FY 2012-13. Of the total expenditure on pay and allowances of Rs 1,29,599 crore for the financial year 2012-13.

3.66 The expenditure per capita on pay and allowances for Civil Central Government personnel for FY 2012-13 was Rs 3.92  lakh per annum i.e Rs  32666/- per month.

Add 35% DA for the period 1/4/2013 to 1/1/2016 average salary of Civil Central Government personnel as on 1/1/2016 at 125% DA which works around  Rs 37500/- per month (Rs 4.50 lakhs per annum ) without 7^th CPC recommendations . ie Rs  1.57,000 crores  

Add average 16% wage increase due to 7^th CPC which works out to Rs 43500/- per month Rs  5.22 lakhs per annum) with 7^th CPC  implementation .

Total Expenditure for 35 lakhs for Civil Central Government personnel for FY 2016-17 is around Rs 1,83,000 crores In respect of pensions expenditure for 55 lakhs pensioners amount is around  Rs 81,000/ crores as on 1/1/2016. which is against the revenue  receipts of Rs 19 lakh crores. The percentage of revenue receipt and wages is just around 13 % of the total revenue is spent on the wages and pension for the Central Government personnel. In fact it is just at 1.3 % of the GDP.   

 This clearly shows that that the increase in impact for the government of India finances is just  below additional Rs  25,000/- crores not additional Rs 1,00,000/- crores as per the media reports.    

The 7^th CPC recommendations’ impact need not give jitters to the government because the rise in government wages will amount to only 0.4 per cent of GDP.

One more aspect is that technically, the recommendations of a Central Pay Commission are only for Central Government employees and States are not bound to follow suit. Indeed, up to the 1980s, States constituted their own Pay Commissions and prescribed their own pay scales, based upon their fiscal capacity.

Let us not be carried over by the media or press reports, hence we should educate each and every employee for struggle and so that a decent wage hike is achieved.                                   

                                          Comradely yours

                                           (P.S.Prasad)

                                          General Secretary