Sixth Pay Commission Report

Sixth Pay Commission Report

Sixth Pay Commission to submit report by April 4

The government on Tuesday the Sixth Pay Commission would submit its report by April 4. "The Commission is to finalise and submit its report within 18 months of its constitution, that is 4th April, 2008," said the Minister of State for Finance Mr P K Bansal to the Rajya Sabha in a written reply.

About implementation of the Pay Commission's recommendations, Mr Bansal said, "since the report is to be submitted, the time frame for its implementation cannot be stated". With regard to the terms of reference of the Sixth Pay Commission, he said the Co mmission is examining the desirability and need to sanction any interim relief till the time its recommendations are made. On media reports about a huge hike in salaries of civil service staff, Mr Bansal added that the Commission is yet to finalise and s ubmit its report, so the information doing the rounds in the media might be speculative.

The Sixth Pay Commission was constituted in October 2006 to recommend comprehensive changes in salary structure of the government employees. It would give recommendations concerning the pay structure of government employees comprising industrial and non- industrial central government employees, All India Services, Armed Forces personnel and employees in the Union Territories. Besides, the Commission would examine the pay structure for Indian Audit and Accounts Department, regulatory bodies set up by Act s in the Parliament and Supreme Court employees, Mr Bansal said.

Pay Commission report may reverse credit rating: S&P

Global credit rating agency Standard and Poor's Ratings Services (S&P) warned on Saturday that India's credit rating, currently at BBB-/Stable/A-3, may be revised lower after the Sixth Pay Commission's report.

"The primary threat to India's fiscal consolidation efforts stems from the Sixth Pay Commission, which will make its recommendations by April 2008," S&P's credit analyst Sani Hamid said, while analysing the Budget for 2008-09 presented by Finance Minister P Chidambaram on Friday.

"Recent fiscal gains, a cornerstone of the sovereign's improved creditworthiness, could not only come under threat but be severely reversed by this pay review.

"The Budget was broadly in line with our expectations. It is largely designed to address numerous issues such as the need to maintain growth momentum, mitigate the impact of higher prices, and boost infrastructure and social spending.

"As expected, given the general election in 2009, it also contains several populist measures such as a debt waiver to small farmers.

"The government may face a multitude of challenges in the coming months that could place pressure on this Budget's fiscal-related targets," he added.

The Budget assumes a Central Government fiscal deficit of 2.5 per cent of the gross domestic product (GDP) for the current fiscal, compared with 3.1 per cent in 2007-08.

While this is better than the three per cent target set out under the Fiscal Responsibility and Budget Management (FRBM) Act 2003, the country faces a host of challenges to its fiscal outlook in the months ahead.

According to Hamid, other challenges come from potential expenditure overruns and a sharper-than-expected economic slowdown.