Increase in salary not a disruption for state finances: Montek

New Delhi, Feb 27 : Deputy Chairman of Planning Commission Montek Singh Ahluwalia has said that an advance on salaries of state government employees would not seem to disrupt state finances.

"I don't think that the impact of this disruption is going to be all that crucial," he said on the possible impact of adoption of the Sixth Pay Commission award by the state governments.

The report is likely to be submitted by early April.

"The state governments would be under pressure to revise the salary of state employees once the Pay Commission submits the report. Pay Commissions are constituted once in 10 years and blind adoption of the Pay Commission award by the state governments will not be a good idea," Ahluwalia said. "Since the Dearness Allowance (DA) does not adequately take care of inflation, he government was made to affect a big increase in salaries of its employees at the end of 10 years. So at the end of 10 years, the government will be benefiting from a squeeze in real pay because the DA was never enough...So you have a big increase," he said.

In anticipation of the Pay Commission recommendations, the Railway Budget has made an ad hoc provision of Rs 5,000 crore for 2008-09 to meet additional liability towards employees and pensioners.

ANI