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NOTIFICATION & LETTER RELATED TO PAY COMMISSION OF RAILWAY

Thursday, July 31, 2008

Global agencies downgrade India's rating

Good politics does not always make good economics. The farm loan waiver and the Sixth Pay Commission payout will put a huge strain on the government's finances and as a result, the global rating agencies are now downgrading India.Sitting inside his office in Singapore's central business district, Tahakira Ogawa - director of global agency Standard and Poors keeps one eye on India. The deteriorating economic environment over the past few months has forced Ogawa to issue a warning that India may lose its investment grade rating and it may be downgraded to what is called the junk rating.Rating agencies say the government pay panel payout, higher oil and fertiliser subsidies, farm loan waiver and cut in duties on petroleum products are all putting a strain on the government's finances."The policy to give farm loan waiver and some other policies due to election year have out a lot of strain on the government's finances and we are being forced to re-rate India," says Ogawa."We don't expect growth beyond 7-7.5 per cent as there is a lot of stress on the fiscal position," says Aninda Mitra, VP, Moody's.Back home, even the RBI that has issued a clear warning that India's balance sheet is taking a beating due to high government spending and ballooning subsidies. And now with major downgrade warnings kicking in North Block officials are working overtime to ensure that India does not to lose the hard earned investment rating it received only 18 months ago

Wednesday, July 30, 2008

Salary revisions may take time

New Delhi
July 30: The hopes of millions of Central government employees, including those from defence and paramilitary forces, for early implementation of their long-pending wage revision are likely to be dashed, as the government is set to refer the Sixth Pay Commission report to the 13th Finance Commission for evaluation and possible impact on the fiscal health of the country.
Sources in the government confirmed that the pay commission report is going to be taken up by the Union Cabinet for consideration during its meeting on Thursday. But as the Cabinet notes suggest, the report is most likely to be referred to the 13th Finance Commission to asses the impact on government treasury, they added.
Interestingly, issues relating to oil bonds worth Rs 39.5 thousand crores and fertiliser subsidies worth about more than Rs 1 lakh crore are also slated to be referred to the Finance Commission.
These issues have been referred to the commission with a set of terms of reference, which include cost assessment in case of the Sixth Pay Commission report. While in case of oil and fertiliser subsidies, the commission has to decide how to stager in repayment and minimise the impact on government exchequer.
The Finance Commission is headed by Mr Vijay L. Kelkar, former Union finance secretary and adviser to the finance minister.
The other members include Ms Indira Rajaraman, emeritus professor, National Institute of Public Finance and Policy, Mr Abusaleh Shariff, chief economist, National Council of Applied Economic Research and Mr Atul Sarma, former vice-chancellor, Rajiv Gandhi University (formerly Arunachal University). Mr Sumit Bose is the secretary to the commission, while Mr B.K. Chaturvedi, member, Planning Commission, is a part-time member.
Incidentally, Prime Minister Manmohan Singh on Tuesday had a presentation session on the Sixth Pay Commission report with Cabinet Secretary K.M. Chandrashekhar.

Tuesday, July 29, 2008

Pay panel review: All eyes now on PM


NEW DELHI: Millions of central government employees, including those from defence and paramilitary forces, are eagerly waiting for Prime Minister Manmohan Singh's response to the changes suggested by a high-level committee that examined the proposals of the 6th Pay Commission. On Monday, the committee, headed by cabinet secretary K M Chandrasekhar and comprising secretaries of other key ministries, apprised the PM of the modifications made in the original recommendations, besides telling him about the financial burden that the implementation of the pay report would entail. Top government sources, however, maintained that the changes were "only minor" as the original report was in itself a complete exercise and the hikes suggested were "already satisfactory". They, however, indicated "some changes" in salaries and allowances of defence, paramilitary and police personnel. The review report is expected to be presented at the next meeting of the Union Cabinet and, if cleared, implemented thereafter. Sources said the entire exercise should not take "more than 10 days", provided the Cabinet does not call for clarifications. The implementation of the report's key financial proposals is likely to further aggravate the inflationary pressure that is already impacting the economy adversely. According to the original report, submitted on March 24, the proposals are to be implemented with effect from January 2006 and the employees are anxiously waiting to receive the arrears of 31 months (till July), which should be a good amount at all levels. The arrear payment burden itself would be over Rs 18,000 crore, but employee associations have argued that at the current salary levels, government servants are finding it hard to cope with rising prices.

Six pay commission Modifications on pay panel 6600 minimum basic, 90000 maximum

Cabinet Secretary K M Chandrasekhar on Monday made a presentation on modifications of 6th Pay Commission recommendations before Prime Minister Manmohan Singh.
Although the details of the improvements, suggested by the high-level committee, were not known immediately, it is learnt that the committee informed the Prime Minister about the financial implications of the modifications.
The Government had earlier asked a committee of secretaries, headed by Chandrasekhar, to look into the recommendations made by Justice B N Srikrishna, who headed the 6th Pay Commission, on the salary structure of government employees following protests from different groups, especially personnel from the armed forces and IPS officers.
The pay commission has suggested an effective increase of 28 per cent in salaries of over four million central government employees.
The commission recommended implementation of the revised pay from January 1, 2006, which would impose an arrear payout burden of Rs 18,060 crore on the government.
The revised pays fixed the salary of Cabinet Secretary at Rs 90,000 a month and that for a Secretary at Rs 80,000 per month, while making Rs 6,660 as the minimum entry level salary.
Recommending a substantial increase in allowances and other benefits, the Commission also suggested a 40 per cent increase in pension and family pension.

Monday, July 28, 2008

Pay panel award likely in August

New Delhi, July 28: The government could announce the implementation of the Sixth Pay Commission proposals as early as next month, highly placed sources said today.
A 13-member committee of secretaries, headed by cabinet secretary K.M. Chandrasekhar, screening the proposals is said to be “at the fag end” of the process. Over 3.3 million government employees are expecting a hike. The pay panel had submitted its report on March 24.
The committee screening the pay panel’s suggestions was formed at the insistence of Prime Minister Manmohan Singh following complaints from several quarters. Its report will be submitted to the cabinet.
The screening committee also includes the revenue and secretaries in the finance ministry, the home secretary, the defence secretary and the special secretary (internal security) in the home ministry. The secretaries of the departments of personnel and training, pension and pensioners’ welfare are also its members.
Work on the recommendations could have been wrapped up faster but the government’s focus has been diverted in the past few days to terror in the wake of the back-to-back serial blasts in Bangalore and Ahmedabad. The preoccupation with the strikes could also delay social projects and reforms the Centre wants to push with greater vigour after winning the trust vote on July 22.
Other legislations from which the focus has shifted include a bill on social security for unorganised sector workers. The review of welfare schemes like the National Rural Employment Guarantee Scheme, the Integrated Child Development Scheme and the 15-point programme for minorities could also be delayed, the sources said.

Modifications on pay panel suggestions presented to PM

New Delhi (PTI): Cabinet Secretary K M Chandrasekhar on Monday made a presentation on modifications of 6th Pay Commission recommendations before Prime Minister Manmohan Singh.
Although the details of the improvements, suggested by the high-level committee, were not known immediately, it is learnt that the committee informed the Prime Minister about the financial implications of the modifications.
The Government had earlier asked a committee of secretaries, headed by Chandrasekhar, to look into the recommendations made by Justice B N Srikrishna, who headed the 6th Pay Commission, on the salary structure of government employees following protests from different groups, especially personnel from the armed forces and IPS officers.
The pay commission has suggested an effective increase of 28 per cent in salaries of over four million central government employees.
The commission recommended implementation of the revised pay from January 1, 2006, which would impose an arrear payout burden of Rs 18,060 crore on the government.
The revised pays fixed the salary of Cabinet Secretary at Rs 90,000 a month and that for a Secretary at Rs 80,000 per month, while making Rs 6,660 as the minimum entry level salary.
Recommending a substantial increase in allowances and other benefits, the Commission also suggested a 40 per cent increase in pension and family pension.

DA correction to add to pay panel’s goodies


NEW DELHI: The Sixth Pay Commission award for government officials is likely to be sweetened with an upward revision in the dearness allowance (DA) entitlement. The committee of secretaries (CoS) looking into the recommendations made by the Sixth Pay Commission has suggested a change in the DA calculations. This could result in additional benefit of Rs 300-3,000 a month to a government employee, depending on her level. The CoS, headed by Cabinet secretary K M Chandrashekhar, is giving finishing touches to the report that is expected to be submitted soon. The report would then go to the Cabinet for approval. Government sources said the change has been suggested in the wake of an across-the-board protest by government employees against the way DA allowance was fixed. The Fifth Pay Commission had recommended that the 50% DA payable in April 2004 be merged with basic pay. The dearness pay was to be counted as basic pay for all practical purposes, including for retirement benefit. Thus, logically, as on January 1, 2006, the recommended date of Sixth Pay Commission award, the 24% DA payable should have been on a salary that included the 50% DA that was merged with basic pay from April 2004. In its calculation, however, instead of compounding the two DA components — 50% as on April 1, 2004 and 24% as on January 1, 2006 — the commission added them, yielding a figure of 74% composite DA. Consequently, while shifting to the concept of grade pay, the pay commission fixed the base salary as on January 1, 2006, at the basic pay drawn along with dearness allowance at the rate of 74%, and rounded it off to next multiple of 10. The anomaly resulted in a loss of roughly 7% to government employees. To put it simply, if an employee had a basic salary of Rs 100 on April 1, 2004, according to the Fifth Pay Commission calculation, he would have a total salary of Rs 150 (including 50% DA). A 24% DA on that would increase his salary to Rs 186 — and not Rs 174 on January 1, 2006, used as the base for calculating Sixth Pay Commission award. The committee of secretaries is understood to have proposed that the anomaly be corrected and the DA be fixed at 86% and not 74%. So, in case of a government employee in the Rs 2,550 pre-revised payscale, the revised pay in running pay band would become Rs 4,743 (increase of 86%) against Rs 4,440 (74% increase), a gain of over Rs 300. At the director level, in the payscale of Rs 18,300, the difference because of the change would be over Rs 2,000 a mo .