Serving govt employees have benefited more than pensioners
Pension liabilities as a share of the Centre’s total salary cost have reduced sharply after implementing the Sixth Pay Commission (SPC) recommendations, indicating that serving government employees have benefited more than pensioners.
Pensions as a percentage of total wages and other allowances paid to government employees, defence and railway personnel in 2009-10 are expected to be 43.77 per cent, down from 48 per cent a year ago.
| GOVT SALARY BILL | ||||
| 2006-07 | 2007-08 | 2008-09* | 2009-10* | |
| Total emoluments (Rs crore) | 61,554 | 68,645 | 94,742 | 1,16,796 |
| Pension (Rs crore) | 32,396 | 34,663 | 45,480 | 51,130 |
| Pension as a % of salary | 52.63 | 50.49 | 48.00 | 43.77 |
| *Excluding salary arrears Source: Budget documents | ||||
In 2007-08, this ratio was 50.49 per cent. While the increase in expenses due to salaries and pensions have been attributed to the SPC recommendations, experts are not sure why pensions as a percentage of total salaries have been decreasing over the years.
“Maybe the rise in allowances for government employees was more than the increase in the basic salary component. Pension is pegged against salaries and the allowances component is not included,” said a senior official of a key economic ministry who did not wish to be identified.
Budget documents showed that in 2009-10, pension paid by the central exchequer to its employees, including defence personnel, railways and the department of posts, is expected to expand by 12.42 per cent to Rs 51,130 crore, from the revised estimates of Rs 45,480 crore in the previous financial year (refer to table).
At the same time, salaries paid to its work force, including all assorted allowances, increased by 23.27 per cent and stood at Rs 1,16,796 crore in 2009-10, against Rs 94,742 crore in the previous year, when it posted an annual rise of 38.01 per cent.
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This is excluding the arrears paid on account of the increased salaries due to the SPC recommendations.
In August 2008, the government had approved a rise of 28-40 per cent in basic salary levels for government employees, which was made applicable from January 1, 2006.