Amid a widening gap between the salaries offered by private sector companies and the government pay-scales, the Seventh Pay Commission has set the ball rolling on the process of implementing a new pay package for over 50 lakh central government employees by sending a missive to all central ministries eliciting views on whether the current remuneration packages are sufficient to attract talent to the prestigious civil services.
In a four page questionnaire, the pay panel wants to know how attractive is the annual increment, ways to reward good performance and the changes introduced by the Sixth Pay Commission such as pay bands and pay grades.
“A questionnaire seeking the considered views of stakeholders is enclosed… so as to enable the Commission to take them into account as part of its examination of the issues that it is mandated to address,” said the missive by the pay panel, requesting all replies by May 10.
The panel has also sought comments on determining the basis for pay fixation at the highest and lowest levels, variable pay, the effectiveness of the annual increment on July 1, retirement benefits under the New Pension Scheme as well as experiences of government departments with outsourcing of jobs.
Significantly, the pay panel has a dedicated section on issues relating to the defence services seeking views on how to evolve parity between salaries of civil and defence personnel. It is also expected to review benefits to war widows and disabled soldiers.
The pay panel that was, one of the last pre-poll bonanzas announced by the UPA was approved by the Cabinet on February 28 and is expected to submit its recommendations within 18 months.
Headed by former Supreme Court judge Ashok Kumar Mathur, it was asked to finalise its recommendations while “keeping in view the economic conditions in the country” and fiscal prudence.
The Sixth Pay Commission was set up in 2006, and gave its report after 18 months in March 2008, costing the Exchequer an additional Rs 26,035 crore in the first year and is considered one of the main reasons why the government missed its fiscal deficit target.
Accordingly, the Seventh Pay Commission that is looking into revising salaries of over 50 lakh central government employees and remuneration of 30 lakh pensioners has asked for ideas on how to address the rising expenditure on defence pensions.
It has also sought views on how to limit the impact of its report on state governments. “The recommendations of the Pay Commission are likely to lead to similar demands from employees of state governments…to what extent should their paying capacity in devising a reasonable remunerative package for Central Government employees,” said the questionnaire.
The panel has also sought views on the payment of bonus, which is one of its terms of reference. Additionally, it has asked for comments on the pay structure of sectoral regulators.