Government expenditurer on CG employees and actual impact on government finances

          There are various reports in the media about the impact of the 7th CPC recommendations on the common man and the government resources at large, the reports suggest that additional amount of    Rs  one lakh crores of public money has been spent for implementation of the 7th CPC recommendations for 35 lakhs central Government employees, Perhaps the strongest criticism of Pay Commission awards is that they play havoc with government finances and also  state government demand support to implement the 7th CPC recommendations. At the aggregate level, these concerns are somewhat exaggerated and which is totally wrong.
Let us examine the 7th CPC report vide para no 3.65 and 3.66 and the website of Government of India Ministry of Finance Department of Expenditure Pay Research Unit for Brochure on Pay and Allowances of Central Government Civilian Employees visit website :

The 7th CPC report para number 3.65 and 3.66

3.65 The total expenditure on pay and allowances for civil personnel of Central Government in the recent years is brought out in Table 9.

Table 9: Expenditure on Pay and Allowances
Amount(Rs crore )
51,664 80
As a percent of GDP  
The Commission has obtained details of expenditure from each ministry/department for up to FY 2012-13. Of the total expenditure on pay and allowances of Rs 1,29,599 crore for the financial year 2012-13.
3.66 The expenditure per capita on pay and allowances for Civil Central Government personnel for FY 2012-13 was Rs 3.92  lakh per annum i.e Rs  32666/- per month.
Add 35% DA for the period 1/4/2013 to 1/1/2016 average salary of Civil Central Government personnel as on 1/1/2016 at 125% DA which works around  Rs 37500/- per month (Rs 4.50 lakhs per annum ) without 7thCPC recommendations . ie Rs  1.57,000 crores  
Add average 16% wage increase due to 7th CPC which works out to Rs 43500/- per month Rs  5.22 lakhs per annum) with 7th CPC  implementation .
Total Expenditure for 35 lakhs for Civil Central Government personnel for FY 2016-17 is around Rs 1,83,000 crores In respect of pensions expenditure for 55 lakhs pensioners amount is around  Rs 81,000/ crores as on 1/1/2016. which is against the revenue  receipts of Rs 19 lakh crores. The percentage of revenue receipt and wages is just around 13 % of the total revenue is spent on the wages and pension for the Central Government personnel. In fact it is just at 1.3 % of the GDP.   
 This clearly shows that that the increase in impact for the government of India finances is just  below additional Rs  25,000/- crores not additional Rs 1,00,000/- crores as per the media reports.    
The 7th CPC recommendations’ impact need not give jitters to the government because the rise in government wages will amount to only 0.4 per cent of GDP.
One more aspect is that technically, the recommendations of a Central Pay Commission are only for Central Government employees and States are not bound to follow suit. Indeed, up to the 1980s, States constituted their own Pay Commissions and prescribed their own pay scales, based upon their fiscal capacity.

Let us not be carried over by the media or press reports, hence we should educate each and every employee for struggle and so that a decent wage hike is achieved.                                   
                                          Comradely yours

                                          General Secretary       

India’s economy on much higher, stabler footing: Finance Minister

Bengaluru, Feb 3, 2016, PTI:

Finance Minister Arun Jaitley. PTI file photo

Amid global uncertainty, Finance Minister Arun Jaitley today said it is important for India to emerge out of the crisis stronger as it is on a much higher and stabler footing than other nations.

“Unpredictability and volatility have become the new global norm. In these circumstances, it is extremely important for India to emerge and emerge out of the crisis even stronger,” he said while addressing the Invest Karnataka 2016 summit here.

Jaitley said that India is “relatively unimpacted” by some of the factors that have caused the global crisis. “Lower prices of oil and metal commodities substantially suit us. It indirectly impacts us because it shrinks our exports; it makes our markets more volatile, currency more volatile. But compared to the rest of the world, we are still on a much higher and stabler footing,” he said


Also read :
  • Monthly Economic Report pubished by the 
Ministry of Finance Department of Economic Affairs Economic Division 4(3)/Ec. Dn. /2012 . 

You can find the  the government finances is in good shape 

Brief of the second meeting of the Committee on Allowances held today under the chairmanship of Finance Secretary

Shiva Gopal Mishra
National council (staff Side) 
Joint Consulative Machinery for 
Central Government Employees 
13-C, Ferozshah Road, New Delhi-110001 
E-Mail :

No.NC/JCM/2016 Dated: September 1, 2016

All Constituents of National Council(JCM)

Dear Comrades,

 Sub: Brief of the second meeting of the Committee on Allowances held today under the chairmanship of Secretary, Finance(Expenditure), Government of India

To obtain the views of the National Council(Staff Side)(JCM) on the recommendations of 7th CPC relating to Allowances, the second meeting of the Committee on Allowances held today under the chairmanship of Secretary, Finance(Expenditure), Government of India, with the National Council(Staff Side) JCM.

From the Official Side, Secretary(Defence), Home, DoP&T, Postal, Chairman Railway Board, J.S.(Estt.), J.S.(Pers.) and J.S.(IC), and from Staff Side(JCM), all the Standing Committee Members were present in the meeting.

At the outset, Secretary(Staff Side)(JCM) as well as Leader(Staff Side)(JCM) and other Standing Committee Member of the NC/JCM(Staff Side) expressed their anguish for non-formation of High Level Committee as was agreed to by the Group of Ministers(Government of India) for settling the issue of Minimum Wage and Multiplying Factor.

The Secretary, Finance(Expenditure) told that, the committee constituted under the chairmanship of Addl. Secretary(Exp.) with J.S.(Pers.), JS(Estt.) and JS(Imp.) as Members has been made only for this purpose. Let us believe that, after the meeting, report of the said committee would be sent to the Government of India for its acceptance.

The Secretary, Finance(Expenditure) asked the Staff Side(JCM) to give their viewpoint in a Note on the Common Demands to implement these, and the Departmental grievances to their respective departments, and after that, a meeting will again be called.

Staff Side(JCM) strongly demanded that, date of effect of Allowance should be 01.01.2016. The Staff Side(JCM) explained its position as well about its demand that, House Rent Allowance should be 10%, 20% and 30% and Transport Allowance must be rationalized and exempted from the Income Tax, Children Education Allowance should be Rs.3,000 and Hostel Subsidy should be Rs.10,000 and these should also be exempted from the Income Tax.

Staff Side demanded that, Post Graduate and Professional Courses should also be covered in Children Education Allowance. The issue of Special Duty Allowance was also raised for N.E. Region by the Standing Committee Members of JCM(Staff Side). Fixed Medical Allowance should be Rs.2,000 with Dearness Allowance Indexation, Over Time Allowance must be given, Small Family Allowance should be continued and Dress Allowance needs to be reviewed. Various Departmental Allowances, which have been abolished, should be allowed to continue, like Breakdown Allowance in the Railways and Fixed Conveyance Allowance to Postal Department employees. All the Standing Committee Members raised various issues related to Allowances.

Comradely yours,
(Shiva Gopal Mishra)
Secretary(Staff Side)
NC/JCM & Convener