Pay Revision Commission: Higher fitment too much to bear
It is expected to have cascading effect on welfare, developmental programmes
Hyderabad: At a time when the State revenues are severely affected due to the Covid-induced economic slowdown, the latest demand by the State government employees for a higher fitment is likely to have a far-reaching impact on the exchequer and is even expected to have a cascading effect on the ongoing welfare and developmental programmes.
The State government introduced the Budget 2020-21 with estimates of Rs 1.84 lakh crore. With the adverse impact of the pandemic expected to dent the State’s revenues by Rs 52,270 crore for the current fiscal, the government proposed to revise the estimates to about Rs 1.43 lakh crore. Chief Minister K Chandrashekhar Rao had directed the officials to fix priorities and come up with a financial management plan in line with the decline in the revenue.
As per the State revenue collections at the end of December, the government is likely to witness only around Rs 7,000 crore to Rs 10,000 crore increase in its annual revenues.
It may be recalled that the government had announced that it would pay Aasara pension to persons above 57 years of age beginning this financial year. However, the scheme could not be launched due to the adverse impact of the Covid crisis as the State exchequer will be burdened by Rs 1,600 crore per year. The government estimated that if people, who are above 57, are to get Aasara pension, around 6.62 lakh new beneficiaries would be added.
The officials themselves have been claiming that the revenue losses are likely to have a severe impact on the welfare and developmental programmes during the State budget for 2021-22.
Amid these conditions, the Pay Revision Commission has recommended a 7.5 per cent fitment benefit for government employees. The government is already spending an estimated Rs 25,000 crore per annum towards payment of salaries to about three lakh government employees and another 50,000 contract and outsourcing staff. To implement the PRC recommendations and a hike in Dearness Allowance (DA), the State government has to spend approximately Rs 2,200 crore additionally.
However, employee associations have been demanding a whopping 80 per cent fitment which would cause an additional burden of about Rs 24,000 crore on the exchequer. Even if the government decides to offer a fitment of 43 per cent as was implemented earlier in 2016, it has to shell out at least Rs 13,500 crore additionally for paying enhanced salaries and DA. The annual hike in DA is already causing Rs 300 crore burden on the exchequer.
While the three-member committee led by Chief Secretary Somesh Kumar has been holding discussions with the employee associations, it is not clear to what extent the State government will be able to bear the burden especially when the Centre too has cut down the State’s share in the Central taxes. Chief Minister K Chandrashekhar Rao will take a final decision on the issue only after the three-member committee submits its report.
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