VIJAYAWADA: The Committee of Secretaries headed by Chief Secretary Sameer Sharma set up to look into the 11th Pay Revision Commission (PRC) report, has recommended extending 14.29% fitment as followed by the Seventh Central Pay Commission (CPC), to State government employees.
The committee also recommended that the new pay scales, after implementing the PRC come into retrospective effect from July 1, 2018. This is expected to cause an additional burden of nearly Rs 8,000 to Rs 10,000 crore to the State exchequer. The employees' unions, however, expressed their dissatisfaction over the recommendations of the committee.
Sharma submitted the report of the Committee of Secretaries to Chief Minister YS Jagan Mohan Reddy on Monday. Speaking to the media after submitting the report, Sharma said the Chief Minister would take a decision on the report within 72 hours.
He said the committee, in its report, had come up with seven scenarios (of varied fitment and HRA) and also the burden caused to the State government on implementing the report. He also detailed about the increase in salaries of employees of various government departments, induction of the AP State Road Transport Corporation (APSRTC) employees into the government and other welfare measures with respect to employees.
The purpose of constituting PRCs by the Centre and States is to recommend a suitable fitment benefit to employees to neutralise inflationary impact on prices of essential items of consumption effected through the merger of dearness allowance with the basic pay.
On the impact of bifurcation, the committee observed that the State emerged as a revenue deficit one compared to the erstwhile Andhra Pradesh which was revenue surplus.
‘Bifurcation had disastrous impact on State’s economy’
Further, the division of liabilities was done on a population basis instead of GSDP basis, whereas the division of assets was done on location basis. “The damage inflicted by the bifurcation of the State has had disastrous impact on economic and financial parameters of AP,’’ the committee said. The State has further suffered financial hardship due to the freezing of funds to the extent of Rs 2,232.33 crore by Telangana of certain institutions in Schedule IX and Schedule X of the Andhra Pradesh Reorganisation Act, 2014. Further, the State has lost access to institutions under Schedule IX with an asset value of Rs 1.06 lakh crore and those under Schedule X with an asset value of Rs 39,191 crore.
Telangana State power utilities have not paid electricity dues to APGENCO, the committee pointed out. “Further, several provisions of the APRA related to industrial incentives, the establishment of Kadapa steel plant, Ramayapatnam port, etc. are yet to materialise, which has led to slow economic growth of the State,’’ the committee said, and added that the strain on State finances was further compounded by the outbreak of Covid-19 pandemic in December, 2019, which has caused an additional burden of more than Rs 20,000 crore on account of loss of anticipated revenue and additional expenditure towards Covid mitigation measures.
Observing that there was a substantial increase in salaries and pension expenditure of the State, the committee noted that the expenditure on human resources has increased from Rs 52,513 crore in 2018-19 to Rs 67,340 crore in 2020-21. The expenditure on salaries and pensions has surpassed the State Own Revenue (SOR) in 2020-21. While the expenditure on salaries and pensions stood at 84% of the SOR in 2018-19, the same has increased to 111% in 2020-21.
Moreover, it was also observed that the HR expenditure as a percentage of overall expenditure in AP is consistently very high compared to other States. The expenditure on salaries and pensions stood at 36% of the total expenditure in AP in 2020-21, while it was 21% in Telangana. When it comes to fitment, the committee observed that the fitment sanctioned in the previous PRCs is consistently high in the State. “In the ninth PRC, 39% fitment was sanctioned against the recommended 27% and in the 10th PRC, 43% fitment was sanctioned against the recommended 29%,’’ the committee observed and noted that in the last two PRCs, the fitment sanctioned to the State government employees was 82%.
In the same period of 10 years, the fitment sanctioned for Central government employees was only 14.29%. The committee also found that the fitment recommended in other States is lower than that of AP. “Many States like Uttar Pradesh, Gujarat and Rajasthan are adopting the Central Pay Commission (CPC) recommendations, while others like Kerala are giving just 10% fitment,’’ the committee said. It has also recommended that as is done by several other States, AP can also adopt the CPC recommendations and discontinue the practice of constituting State PRC.
11th PRC report
The PRC recommended a fitment benefit of 27% on the basic pay. The PRC arrived at 23% fitment benefit as per its calculations based on ILC norms. However, it recommended 27% fitment benefit as interim relief of 27% is already being given by the State government.
“The fitment benefit should be allowed so as to bridge the gap between the increase in minimum pay as determined in the previous chapter based on ILC norms, on 01-07-2018, over that fixed as on the date of implementation of the last RPS (i.e. 01-07-2013) less the neutralisation of inflationary impact on prices of essential items of consumption effected through the merger of Dearness Allowance with the basic pay.
Based on this principle, in the present case, the fitment works out to be 23%. Keeping in view the fact that the government has already approved an interim relief of 27%, which is higher than the fitment arrived at by the commission based on ILC norms, as mentioned above, the commission deems it proper to recommend a fitment benefit of 27%,” it reads.
Recommendations of Committee of Secretaries
The Committee of Secretaries observed that the fitment sanctioned over the past few years has been consistently high in the State. In the 9th PRC, 39% fitment was sanctioned against the recommended 27% and in the 10th PRC 43% fitment was sanctioned against the recommended 29%.
Thereby, in the last 10 years (2 PRCs), the fitment sanctioned to State government employees was 82%, whereas the fitment sanctioned for Central government employees for the period of 10 years (7th CPC) was only 14.29%. Further, the committee also noted that the Telangana PRC has recommended 7.5% fitment for a period of five years, whereas the 11th PRC of AP recommended 27% fitment for a period of five years.
Not satisfying still!
The State government employees associations have expressed their dissatisfaction over the PRC report submitted by the Committee of Secretaries headed by Chief Secretary Sameer Sharma, which recommended 14.29% fitment
