Pay hikes for Govt. employees to be inflationary, drain on exchequer: Assocham
Industry body the Associated Chamber of Commerce and Industry of India (Assocham) today said while it was not against employees in any sectors of the economy, hefty pay hikes for the central government employees (as has been the experience of the previous pay commissions) will act as a big drain on the government finances and would add to an inflationary pressure.
At that point of time, the exchequer will be bearing the full load of the Food Act and the other welfare schemes like NREGA – whose cost is bound to increase. Is it necessary that the governments all the time have to keep fighting the fiscal deficit issue?
Besides, in the competitive trend, the state governments will also be forced to announce pay commissions with the result that the private sector too will be compelled to hike salaries-leading to overall wage cost to the economy, which in any case is grappling with the slowdown.
The move is out of turn at this point of time, added D S Rawat, Secretary General, Assocham.