Finally Govt of India is going to implement the recommendations given by 7th Pay Commission from January 1, 2016.
It will have cascading effect on its finances which are already in choppy waters. The total burden is expected to be in the range of Rs 1-1.2 lakh crore per annum. The million dollar question is how will the government accommodate this additional liability. The indication has already come. The service tax is expected to go up from 14 per cent to 16 per cent. The excise exemption on many essential items being consumed by the poor like biscuit tea etc Is likely to be withdrawn.
The Railways have already written to the government to provide additional funds so as to bear this burden. All the states cumulatively will require additional finances to the tune of Rs 2.4 lakh crore per annum. Obviously they will further tax a common man. They will divert funds from various other heads just to bear this additional burden. The implementation could have been put on hold for at least two years. This will add salt to the wound of the common man already overburdened with taxes.
S. K. Bansal, Kolkata
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