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Tuesday, June 15, 2021

Punjab: On pay panel recommended hike, finance department puts ball in Cabinet’s court

Punjab is already grappling with an acute cash crunch with a debt of over Rs 2 lakh crore. The state has a fat salary bill of Rs 27,000 crore and a pension bill of Rs 12,000 crore annually.

Written by Kanchan Vasdev | Chandigarh |
Updated: May 27, 2021 11:05:14 pm
The revised salary and pensions will mean an additional annual expenditure of Rs 7,000 crore yearly.

DAYS after the 6th Pay Commission recommended about 20 per cent increase in salaries and pensions of Punjab government employees, burdening the already funds crunched government with an extra expenditure of Rs 35,000 crore, the Finance Department has left it on the Cabinet to decide on how to generate the funds.

The Cabinet is likely to discuss the issue in its next meeting scheduled for June 2.

A functionary of the government said that as the commission recommended an over 2-fold increase in salaries of all employees, from January 1, 2016, the Cabinet will decide on whether to give the increased salary from this year onward and pay the arrears in installments in the next five years.

The government has already paid 5 per cent interim relief to the employees that cost the state exchequer Rs 25,000 crore. The commission’s report means an increase in minimum pay from Rs 6,950 to Rs 18,000 per month, with retrospective effect from January 1, 2016.

Punjab is already grappling with an acute cash crunch with a debt of over Rs 2 lakh crore. The state has a fat salary bill of Rs 27,000 crore and a pension bill of Rs 12,000 crore annually.

The revised salary and pensions will mean an additional annual expenditure of Rs 7,000 crore yearly. Successive Finance Ministers have rued the fat salary bill that burns a hole in the state’s pocket and the state has to compromise on development projects.

Former Deputy Chief Minister Sukhbir Singh Badal had stated that Punjab’s employees had the maximum salary compared to other states.

The state’s economy is further under stress and the financial situation is precarious due to Covid.

The commission had suggested a major hike in salary and other major benefits, and also substantial increase in allowances for government employees. The average increment in salaries and pensions of employees was expected in the range of 20 per cent, with salaries in for a 2.59 times increase over the 5th Pay Commission recommendations.

All major allowances were proposed to be revised upward, translating into 1.5 to 2 times increase, with rationalisation in certain allowances.

The report was sent to the Finance Department for detailed study, but as per government’s commitment in the Vidhan Sabha, is to be implemented from July 1 this year.

The pay commission was set up by previous SAD-BJP government in 2016. The Congress had earlier promised that the recommendations of the commission would be implemented by December 2019.

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