RBI advises states to cautiously approach pay revision

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Mumbai, Feb 24 (UNI) Pointing out the fiscal deteroriation that several states had suffered following implementation of the Fifth Central Pay Commission in the 1990s, The Reserve Bank of India has asked the states to cautiously approach the issue taking into account their fiscal capacity.

In the caution made out in a recent review by the RBI on State Finances, the Apex Bank has urged the states not to adopt the Central pay panel recommendations for their staff, unmindful of their capacity to bear the additional burden.

The Sixth Pay Commissionm, headed by Justice B N Srikrishna, was constituted by the Central Government in October 2006 and its 18-month tenure will end in April when it is scheduled to submit its recommendations to the Government on revision of pay structure to Central Government employees and pensioners.

RBI told the states to decide on wage hike for their employees after considering the fiscal capacity, employee strength, size of popuation and the required complementary expenditure for productive employment. Several states have constituted their own pay commissions.


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