THIRUVANANTHAPURAM: The implementation of the 10th Pay Revision should have inflicted what economists term a “heavy fiscal shock” on the economy. But a close perusal of Vote-on-Account for 2016-17 figures reveal that the ‘pay revision shock’ will be mild.
In 2011-12, when the 9th Pay Revision was implemented, the increase in salaries from the previous year was a whopping 45 per cent. In the coming fiscal, the burden will only be 19 per cent, slightly more than the average annual increase in the salary bill of 11 per cent.
This shortfall is seen in the case of pensions, too. In 2011-12, the increase in pension over the previous fiscal was 26 per cent. However, in 2016-17, the increase will only be 18 per cent. There is no trace of any money allocated for dearness allowance (DA) even in the fine print of the Budget.
A pay revision year will necessitate a considerably higher-than-normal increase in salary expenditure. "While a normal year will see a routine increase of 11 per cent in salary bill, a pay revision year will witness the bill swelling by over 40 per cent," pointed out economist Jacob Thomas.
If the budgetary allocation for salaries does not reflect the enormity of the revision, the inference is that Chief Minister Oommen Chandy had kept at least Rs 3,000 crore less than the actual pay revision requirement.
"This eagerness to provide whimsical figures has been a UDF hallmark," said Gopan Mukundan of Kerala Sasthra Sahithya Parishad. "Paying lip service to pay revision and then keeping a lower allocation in the Budget, Mr Chandy was artificially trying to keep the revenue deficit low," he said.
Mr Chandy has budgeted a revenue deficit to be 1.5 per cent of the GSDP. Already there are charges that he had inflated revenue figures to paint a rosy picture. The latest CAG report, too, had pulled up former finance minister K. M. Mani for this "window dressing" practiced during budget presentations.
