Nov 302015
 

State Governments Prepare Themselves for Implementation of 7th Pay Commission

It was likely to happen. When Central government employees start getting more salary, why won’t state government employees demand it? So in order to fulfill their upcoming demands state governments have also started preparations to hike the salaries of their employees. Funding for the initial hike will be provided by Union Budget of next financial year, so it can be expected that the benefits of CPC’s recommendations may start reaching state government employees after allocation of funds in fiscal year 2016 – 17.

While this is certainly a great news for government servants, some concerns are also associated with it. The concerns, as you may expect, are about financials of states. For example, a Niti Ayog member had recently had recently raised concerns regarding compensation hike recommended by the commission. His view was that such a hike may strain the finances of state governments as they’ll come under pressure to increase the salaries of their employees after Central Government does so for its employees. Some state governments have also raised such concerns before. For example, West Bengal’s government had said that upon implementation of these recommendations it’ll come under pressure to set up its own Pay Commission while internally its debt-ridden and is unable to afford any kind of financial stress. Both West Bengal and Karnataka governments have sought 100% assistance from Centre to implement the suggestions of 7th CPC for their employees.

But despite this strain at least one state government will try to implement the recommendations before others: the government of India’s most populous state Uttar Pradesh. Why? You may ask. Because 2017 assembly elections of the state are approaching, and Akhilesh-government will definitely try to use the salary hike as a tool to lure the voters.

The 7th CPC report submitted to Finance Ministry on November 19 has recommended increasing the compensation of government employees by 23.55%. It has also suggested implementing OROP for all civil servants, which has currently been implemented for armed forces only. These recommendations will cost government up to Rs. 1.02 lakh crore, and government has planned to bear around 72% of this from General Budget while remaining 28% will be borne by Railway budget.

Establishment of implementation cell has certainly rang the bell for states to prepare themselves for upcoming changes. Now it’ll be interesting to see that besides Uttar Pradesh which states come forward before others to implement the so-called financially straining recommendations of 7th CPC.

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