The implementation of the Seventh Pay Commission recommendations will not impact government’s fiscal consolidation roadmap as it has been taken care of, Minister of State for Finance Jayant Sinha said.
He also ruled out any expenditure cuts in the forthcoming Budget to meet the Rs 1.02 lakh crore stress on government finances once the recommendations are implemented.
“We are confident that we will be able to stick to fiscal consolidation roadmap even with what the Pay Commission recommended. The roadmap that we have put together is taking into account what the impact of the Pay Commission would be,” Sinha told reporters here.
The government had unveiled a fiscal consolidation roadmap in Budget under which fiscal deficit was to be brought down to 3.9 per cent of GDP in 2015-16, 3.5 per cent in 2016-17 and 3 per cent by 2017-18.
Fiscal deficit in 2014-15 was 4 per cent of GDP.
Asked if it will require a cut in expenditure or tax measure to bolster revenue, Sinha said: “No. We are confident that we will continue to follow the fiscal policies that we are following right now while at the same time being able to adhere to the fiscal consolidation roadmap”.
The 7th Pay Commission yesterday recommended increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17.
The new pay scales, subject to acceptance by government, will come into effect from January 1, 2016.
Several rating agencies and brokerages have said that a proposed 23.6 per cent hike in salaries and pensions of government employees could hurt India’s finances.