7th Pay Commission: Latest news today, 5 days to go, outgo on pension to exceed expenditure
New Delhi, Aug 9: There are five more days to go and there is immense speculation that good news on the 7th Pay Commission would be announced on August 15.
Central Government employees are waiting for an announcement on a pay hike beyond the recommendations of the pay panel. As pointed out earlier, the only possibility is an announcement and the modalities of a pay hike or rise in fitment factor, if any are still being worked out.
Government sources say that the CG employees are advised not to believe the speculation doing the rounds in the media. However, I can confirm that the issue is not dead and work on it is underway. It is not a simple issue and the financial implications if, the basic pay is raised to Rs 26,000 are still under consideration, an officer said.
The question now is will Modi announce a pay hike on August 15, Independence Day.
Sources say that the possibility is remote. However, the Prime Minister is most likely to raise the issue and this would provide an insight into what the government is thinking on the issue. There have also been demands that the retirement age be increased as was originally proposed by the Madhya Pradesh government. This is a decision that is likely to go through faster when compared to the issue related to the 7th Pay Commission, sources also say.
Meanwhile the government's outgo on pension will exceed the expenditure on salaries by nearly Rs 10,000 crore in the current financial year, and the trend will continue for two more years till March 2021, a Finance Ministry document said.
As per the Medium Term Expenditure Framework, tabled in the Lok Sabha, the outgo towards subsidies and interest payment too will witness substantial increase in the coming years.
However, on the positive side, the government will be able to bring down the fiscal deficit to 3 per cent of GDP by 2020-21, from a projected 3.3 per cent in the current fiscal and 3.1 per cent in 2019-20.
As per the projections, the salary bill of the government will go up from Rs 1.50 lakh crore in last fiscal to Rs 1.58 lakh crore this year. It will further rise to Rs 1.66 lakh crore in 2019-20 and Rs 1.74 lakh crore in 2020-21.
However, the pension outgo with outpace the salary expenditure going up from Rs 1.45 lakh crore in last fiscal to Rs 1.68 lakh crore in current fiscal, Rs 1.79 lakh crore in 2019-20 and Rs 1.84 lakh crore in 2020-21.
The capital expenditure, a reflection of asset creation, is likely to rise from budgeted Rs 3 lakh crore in the current fiscal to Rs 3.27 lakh crore in 2019-20 and further to Rs 3.76 lakh crore.
The MTEF, which sets out a three-year rolling target for expenditure, has assumed that GDP growth of 7.3 per cent in current fiscal, going up to 7.5 per cent in 2019-20 and going up to 7.8 per cent in 2020-21. The pension spend by the government to beat salary payment could be a result of the 7th Pay Commission.