New Telangana PRC likely to impose huge burden on the exchequer

Govt. announces 2nd PRC, likely to impose huge burden on exchequer. Interim relief of 5% to all categories of employees with effect from Oct. Salaries/wages & pension components have been rising in last 5 yrs. Regularisation of posts added significant numbers to cadre strength. 1st PRC recommended 7.5% fitment, CM implemented 30%.

The State government’s announcement of the constitution of a second pay revision commission (PRC) with retired bureaucrat N. Shiva Shankar is likely to impose huge burden on the exchequer.

The government simultaneously announced interim relief of 5% to all categories of employees with effect from October payable in November. The interim relief itself is likely to entail an additional burden of around ₹2,000 crore on the exchequer, according to Finance department senior officials.

The government has no doubt put in safeguards in the announcement of the new PRC claiming that the commission should consider current pay scales of the State Government employees vis-à-vis pay scales of employees of other State governments and the Central government while making its recommendations. It has been mandated to look into aspects like State revenue growth, commitments for ongoing and future investments, development programmes, welfare schemes and others while submitting its report within six months.

A look at the provisional figures submitted to the Comptroller and Auditor General of India reveals how the salaries/wages and pension components have been rising in the last five years. Budgetary allocation towards salaries/wages was ₹23,018 crore in the financial year 2018-19 and for pensions it was ₹11,697 crore. Allocations under the two heads increased to ₹38,627 crore and ₹13,024 crore respectively during the current fiscal.

This apart, the government has recently regularised the services of contract, outsourcing and other employees who were not on rolls. Regularisation of posts was on the higher side in the police, health and education departments entitling few thousands of employees to the regular pay scales.

“The regularisation process has added significant numbers to the cadre strength and this will also have a bearing when the second PRC starts the preparing report relating to the revised pay scales,” a senior official said.

It may be recalled that the first PRC headed by retired IAS officer C.R. Biswal recommended fitment benefit of 7.5% considering various factors including the State finances. But, Chief Minister K. Chandrasekhar Rao has implemented a significantly higher 30% fitment for the employees.