Uttar Pradesh: State employees to benefit from political windfall

The salary hike for government employees is likely to put an additional burden of Rs 24,000 crore (Rs 240 billion) on the state exchequer, says Virendra Singh Rawat.

With the Centre deciding to implement the Seventh Pay Commission recommendations, the Uttar Pradesh government is likely to follow the suit in the near future. 

The salary hike for government employees is likely to put an additional burden of Rs 24,000 crore (Rs 240 billion) on the state exchequer. The current salary and pension bill of UP is about Rs 100,000 crore. 

The move would benefit 1.6 million government employees and over half a million pensioners. With state polls due in early 2017, the ruling Samajwadi Party government is expected to keep its 2.1 million employees/pensioners in good humour by announcing pay hikes similar to  that of the Centre. 

UP principal secretary, finance, Rahul Bhatnagar told Business Standard that the state government would soon constitute a committee to suggest a road map to match the pay structure of state employees with their central counterparts. The committee, comprising experts as well as serving/retired bureaucrats, would give its report in 5-6 months, he said. 

Bhatnagar said the government wants to implement the salary hike as soon as possible. The committee would study the implications of pay hike in the context of UP and submit its report for approval by the Cabinet led by Chief Minister Akhilesh Yadav. 

The state would provide additional funds for this purpose through supplementary Budget when the Assembly meets for the monsoon session. 

In November 2008, then state government led by Mayawati had approved pay hike for about 1.5 million state employees. 

These pay scales came into effect retrospectively from January 1, 2006, entitling all employees to arrears. The beneficiaries started getting salaries as per the revised pay scales from January 1, 2009. The government had then estimated additional burden of Rs 14,000 crore towards arrears and pensions, over and above the Rs 5,000-crore additional expenditure towards salary hike.