Wage bill swells by 3% on pensions, DA

SALARIES AND PENSIONS

Old-age pension hiked from Rs 75 to Rs 200 per month.

The Centre's wage bill is projected to swell 3 per cent to Rs 23,033 crore in the next fiscal. The pension liability is projected to go up by Rs 1,080 crore, an increase of 5.06 per cent, mainly on account of growth in the number of pensioners and provision for dearness allowance instalments.

The revised estimates for the current year suggest that the government has spent 3.77 per cent more than last year on salaries, including that of Railway staff. This amounted to Rs 22,361 crore during 2005-06.

The Railways, which account for nearly 50 per cent of the Centre's wage bill, are projected to see a 2.6 per cent increase in the salary outgo to Rs 11,735 crore in 2006-07, over Rs 11,436 crore in 2005-06.

Excluding the Railways, the Centre's wage bill is projected to go up by 3.4 per cent to Rs 11,298 crore in 2006-07, over Rs 10,925 crore in 2005-06.

The second largest contributor to the wage bill, the department of posts, is projected to show a decline by 1.2 per cent to Rs 2,040 crore in the coming fiscal, compared with Rs 2,065 crore in the current year. The share of the postal department in the total bill is 8.8 per cent.

Finance Minister P Chidambaram said he would involve the department of posts to set up a system under which pension would be directly credited to the account of a beneficiary in a post office or a bank.

The process, he added, was expected to be completed within two years.

Providing Rs 1,430 crore for 2006-07 for old-age pensions under the National Social Assistance Programme to destitute persons above the age of 65 years, the finance minister promised to provide additional funds, if required, during the course of the year.

The finance minister has hiked old-age pension from Rs 75 per month to Rs 200 per month. Announcing this, he urged the state governments to make an equal contribution from their resources so that a pensioner can get Rs 400 per month.