PHDCCI against 6th Pay Commission

New Delhi, July 20 (UNI) Industry Chamber PHDCCI today strongly reacted to the reports about the Cabinet giving a go ahead to the 6th Pay Commission.

Pay Commission recommendations on hikes benefit 4.2 million Central government employees and 20 million state government employees, but are paid for by 380 million who work outside the government, PHDCCI Secretary General Bibek Debroy said.

While the recommendations on downsizing and wage increases linked to productivity are ignored, the increase in wages and salaries is alone implemented, the Chamber said, adding that both hikes in EPF rates and wage, salary and pension increases represent regressive transfers from the poor of the country.

The 12th Finance Commission and a Committee headed by the Cabinet Secretary had argued against the Sixth Pay Commission, several states had also argued that the Centre should not announce Pay Commissions without consulting them first, since states would have to follow the Centre in implementing hikes and this upsets the fiscal balance of states, which have just recovered from the impact of the Fifth Pay Commission, the Chamber said.

Following the Fifth Pay Commission, the wage burden for the Central government went up by 100 per cent and that for states by 75 per cent, PHDCCI argued.

The debt/swap scheme, which had been used to compensate states after the 5th Pay Commission, will no longer be available when the 6th Pay Commission recommendations are implemented, Mr Debroy said.

Once the impact on states and other quasi-government bodies is factored in, the 6th Pay Commission will cost 1.5 per cent of GDP, something the country can ill afford, he said.

This announcement will therefore lead to confiscatory taxation, which the PM has said he is against, hikes in interest rates and a slowdown in growth, the Chamber pointed out.

UNI VJ ARB DB2004