M'rashtra clears 6th pay recos, takes addl Rs 8,000cr load

Maharashtra cabinet today cleared the proposal to implement the recommendations of sixth pay commission from the April 1st putting the additional burden of 8091 crore on the state finances which are under strain due to loan waiver and tax revenues drying up to due to recession.

The state cabinet's decision will bring cheers to 14 lakh employees of the state government and seven-lakh pensioners who are going to get pay hike between 20 to 25 per cent.  The state government will get benefit of the pay commission's recommendation from April 06. 

However instead of giving the amount of arrears directly to employees, state government will deposit the arrears in the provident fund accounts of employees over next five years.

The decision to implement the pay panel's recommendation from FY 06 will put the burden of 18,370 crore on the state government.  But retired employees who are entitled to get arrears will be paid in the cash.  Even if one adjusts, hike to inflation, every employee will get at least five percent hike, said senior official from finance ministry.

Maharashtra government recently announced loan waiver of Rs 6,200 crore to farmers, who were not covered by central government's loan waiver package.  Besides this due to recession state government is going to miss its target of collection of VAT, stamp duty and other duties by 20 to 25 per cent, told informed sources from finance ministry.

Replying to question while speaking with media persons after the cabinet meeting chief minister Ashok Chavan said, "The decision had been taken "in consultation with the finance department and taking into account the comfort level of the state finances".

However he did not specified the sources from where finances will be raised to give higher pay to employees and said, "There will be no cut applied to developmental works".