Finance Minister P Chidambaram said on Thursday the impact of revised pay scales on inflation was taken into account when the government cleared the recommendations and the Budget deficit targets would also be adhered to.
Both the Union Budget and Railway Budget have a capacity to bear the burden on account of implementation of revised pay scale for central government employees, the finance minister told reporters after the Cabinet meeting.
He said the burden on Union Budget will be Rs 15,717 crore (Rs 157.17 billion) and Rs 6,414 crore (Rs 64.14 billion)on Railway budget for 2008-09.
When the Budget for 2008-09 was prepared, impact of Pay Commission's recommendations was taken into account.
"The pay out is not a new development. It has been factored into when Budget was prepared and Prime Minister's EAC and RBI gave their estimates," the minister said.
He said the Budget deficit targets for 2008-09 will be adhered to. Asked about off-budget liabilities, he said they are separate liabilities.
