Nov 272015

7th Pay Commission Himachal Pradesh

There is going to be a 23.55 percent hike in the salaries, allowances and pensions in the state of Himachal Pradesh. The recommendation was passed by the 7th Pay Commission on 19th November. This recommendation is said to neutralize the recent gains the state got from the centre as the cash strapped state was promised support in numerous schemes in a 90:10 ratio.

The said recommendations will be benefitting around 47 Lakh employees of the central government whereas pensioners that amount to 52 lakh will also be getting a raise. This will be impacting the central’s budget by Rs. 73,650 crore whereas the budget of Railway will be effected by Rs 28, 450 Crore.

The 7th Pay Commission recommendation also favored and new health insurance scheme that will see the gratuity ceiling increase to Rs 20 Lakh, doubling it from previous ceiling.

According to experts, if the commission recommendations are implemented in the state, the salaries and pensions alone would cost around 15,000 crore rupees.

If the pay panel’s recommendations are implemented in letter and spirit, Himachal’s salary and pension bill would cross `15 000-crore mark! One official who didn’t wanted to be named said that the commission would be helping in relieving the grievances of the pensioners and the employees but if the recommendations are implemented on the same basis as that of Punjab, it will cause a lot of problems for the state which is already facing a financial crunch. The expected setback is around 2,200 crore rupees!

It should be noted here that currently, the state is to receive around 24,000 crore under the centrally supported schemes grants whereas it will be also getting around 13, 351.83 crore transfers from the central government. This will also include an appreciation of 3900 crore from last year. Also 29% of the budget of the state is allocated towards salaries of its employees, 10% is directed towards interest payments whereas 5% of the budget is directed towards loans and their repayments. 14% is used to pay pensioners while a whopping 40% is used for development projects.

Though the recommendations is a good step, it should be noted that the state which has been struggling to get on its feet with its cash problems. Considering the fact that the central government had actually pitched in to help the state, such a recommendation is not only ill timed but if accepted will reverse any benefits from the help.

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