States want Centre to share burden from 7th pay panel

The government has cleared the terms of reference for the seventh pay commission for central government employees, but the states, which usually follow central norms in fixing pay scales for their employees, want to be adequately compensated for the hit they would have to take on their exchequer.

They want the Centre to direct the 14th Finance Commission to compensate states for implementing pay scales, to be recommended by the pay panel.

Although implementing central pay panel's recommendations is not mandatory for the states, most states might do so given the precedent. As such, they sought assistance from the Centre, while sending their inputs on the Commission to the Union government.

In fact, some of them such as Punjab have even demanded the terms of reference of the pay panel and also its final recommendations should be discussed in a meeting of the National Development Council (NDC), which comprises all chief ministers and the Central government.

Interestingly, Bharatiya Janata Party's (BJP) Prime Ministerial candidate and Gujarat Chief Minister Narendra Modi said the constant increase in salary of government staff through pay commissions has led to a lot of distortion in the labour market. He wanted the panel to look at restructuring and cutting administrative flab rather than rewarding them through higher pay.

Modi, who in his recent interactions have been advocating the philosophy of maximum governance and minimum government, said any drastic increase in pay structure of central government employees and their corresponding adherence by states would impact their financial condition. According to him, high pay structure creates social and legal problems since the government have to resort to contract employment. Thus, two different categories of employees are created, which is bound to create "social and legal problems".

Congress-ruled state governments such as Assam, Karnataka, Manipur and Himachal Pradesh wanted the 14th Finance Commission - which would submit its report later this year - to adequately compensate those state governments which wish to implement the recommendations of the seventh pay commission.