Sixth Pay panel report next week

The Sixth Pay Commission recommendations are expected to be submitted to the finance ministry early next week, possibly on March 24, official sources said today.

The Commission, headed by Justice B N Srikrishna, was constituted in October 2006. It had been given 18 months to submit its report. The report is expected to benefit an estimated 4.5 million central government employees.

A secretary-level official of the central government said recent reports about the expected increase in salaries were a bit over the top.

"A senior secretary gets Rs 52,000 as monthly salary. I do not expect it to go up to more than Rs 60,000. Salaries of top officials will not be more than that of governors," the official said.

Earlier this year, the Union Cabinet decided to double the salary of the President to Rs 1 lakh a month, even as the Vice-President's salary was raised from Rs 40,000 to Rs 85,000 and that of Governors' from Rs 36,000 to Rs 75,000 a month.

The hike, which is with retrospective effect from January 2006, was necessitated by the fact that members of Parliament were drawing Rs 68,000, more than the Vice-President, who is the Chairman of the Rajya Sabha.

Going by this order of precedent, the country's highest ranking bureaucrat "" the Cabinet Secretary "" cannot be paid more than Rs 75,000.

Accordingly, the Commission is expected to recommend hiking salaries by up to 36 per cent for certain lower grades, even as the number of pay grades would be merged. House rent allowance (HRA) may also be capped at Rs 12,000 per month in grade A-plus cities "" Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad.

There is also the likelihood of HRA being fixed at 30 per cent of basic pay, even as various ranks in the defence services are likely to see marginally higher hikes than other services.

The financial impact of the Sixth Pay Commission award has been estimated to be within 0.4 per cent of Gross Domestic Product (GDP), similar to the Fifth Pay Commission award of 1996. Given that the Budget has projected GDP at Rs 53,03,770 crore in 2008-09, the impact of the award may well be Rs 21,215 crore.

Observers are also looking forward to the Commission's recommendations relating to introducing productivity-linked incentive scheme, in place of the existing ad-hoc bonus scheme.