Pay hike bill will hit budget and rating, BMS call it disappointing

Fitch Ratings feels that the govt may not be able to fiscal deficit target

GN Bureau | November 20, 2015



Even as there are mixed reactions to 7th pay commission report, international agency Fitch Ratings said today that a proposed 23.6 percent hike in salaries and pensions for about 10 million current and former government employees could hurt the country's finances and underscore the weakness in its sovereign credit profile.

The pay hike proposed on Thursday by the government panel is smaller than past increases as New Delhi faces pressure to curb its fiscal deficit. It would add at least 1.02 trillion rupees ($15.43 billion) to central government spending in 2016 - the first year of implementation - if accepted.

Fitch said the pay hike could challenge the government's goal of achieving a fiscal deficit of 3.5 percent in the year ending in March 2017, unless India can cut spending in other areas or raise revenues.

"The planned wage increase is sufficient to add substantive challenges to achieving the planned medium-term consolidation targets," Fitch said in a statement.

"Delaying an improvement in India's fiscal position would underscore a longstanding weakness for the sovereign credit profile," it added.

Fitch rates India "BBB-minus" with a "stable" outlook. The credit agency said India's government debt burden of nearly 65 percent of gross domestic product was the highest among its "BBB-minus" rated countries, which have a median of 43 percent of GDP.

Meanwhile, RSS affiliate Bharatiya Mazdoor Sangh termed "disappointing" the recommendations of the pay commission and said it will lead to brain drain from the country.

"The 7th pay commission report is disappointing, its fitment benefit is very less, it will lead to brain drain and would have a bad impact on the economy," said Viresh Upadhyay, General Secretary of BMS.

He said that the recommendations submitted to the government this evening show that there is a huge gap between minimum and maximum.

"It has also not addressed the anomalies," he said.

Comments

 

Other News

ONGC acquires 51.11% stake in HPCL

In its bid to create an oil major to match the performance of global and domestic oil and gas players, Oil and Natural Gas Corporation Ltd (ONGC) board has approved the acquisition of entire 51.11 percent shareholding of the government in Hindustan Petroleum Corporation Ltd (HPCL) with a total acqu

Foundation of mine counters measure vessels command laid at Goa Shipyard

Goa chief minister Manohar Parrikar recently laid the foundation stone of the Rs 120 crore- MCMV (mine counters measure vessels) Command, Control & Design Office at Goa Shipyard Ltd, Vasco in Goa. The defence ministry has entrusted the GSL for series construction of sophisticated and hig

Sri Lankan defence secy reviews patrol vessel construction at GSL

A high level Sri Lankan defence delegation headed by secretary of defence, Kapila Waidyaratane PC recently visited Goa Shipyard Ltd. The delegation held discussions with GSL CMD, Rear Admiral (retired) Shekhar Mital. The defence delegation was shown the ongoing shipbuilding activities includ

Are our authorities callous when it comes to ensuring safety of people?

Are our authorities callous when it comes to ensuring safety of people?

Unto the first few

Our constitution promises equality of status and opportunity to all citizens but statistical data suggests that inequalities in wealth and income have increased since independence and are now on an uncontrolled upward spiral. Recently, Thomas Piketty and Lucas Chancel in their aptly titled s

NTPC seeks protection for Gadarwara project

NTPC has sought the help of Madhya Pradesh government for the safety of Gadarwara power project site and the workers who have stopped the work on the site since December 22. It has appealed to the local people to support the project of national importance. Half of the electricity generated

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter