Keeping the wage bill in check: Neither Centre, nor states can relax

Not just the Centre, the states too must worry about the fiscal implications of rising salaries and pensions

North Block, headquarters of the Union finance ministry, has reportedly drawn attention to the growing burden of pay and pensions on the Union government’s finances. How serious is the problem? And are the states facing a bigger problem?

The Union Budget numbers show that the Centre’s total spend on salaries for its civilian staff and the armed forces will be about Rs 3.23 trillion in 2018-19, which is around 13 per cent of its total expenditure of Rs 24.42 trillion. To be fair, the Union government has remained vigilant against rising salaries expenditure. It will grow by only 6 per