Industry chambers cheer pay commission award

NEW DELHI: The 40% salary hike for central government employees recommended by the Sixth Pay Commission would help curb inflation and prevent revenue deficit from rising further, industry chambers opined. The move would also help in retaining talent and making organisations more efficient.

Ficci said the government could afford the additional expenditure since it has to retain talent as much as private sector. ���Given the revenue buoyancy, the government can easily take care of additional expenditure. In order to attract and retain the best talent for efficient functioning, the government must pay higher salaries to its employees. This would make the employees more responsible,��� the chamber said.

The chamber said the move will not lead to an increase in inflation since inflation is linked more to supply-side constraints than demand. Echoing similar sentiments, Assocham said increase in salaries will not fuel inflation and revenue deficit as the country is witnessing a significant growth in direct and indirect tax collections as a result of higher tax compliance.

���The government would witness substantial increase in revenue collections, the benefits of which should go to the employees,��� Assocham president Venugopal Dhoot said. The move will make central government employees more accountable, productive and responsive with the exchequer shedding Rs 12,561 crore in 2008-09 due to higher pay packages, the chamber said.