6th Pay Commission : Implications for everyone

Sixth pay commision is going to have an impact on inflation and YOU even if you are not a government employee !

There are around 19 million (or 2 crore) Indian Government employees. This is slightly less than 2% of the total Indian population. These 2% people are suddenly going to see their monthly income rise by around 20% to 25%. Not only that, they are also supposed to get arrears totalling more than 18,000 crore rupees. Remember the CRR hike of 25 basis points by RBI a few weeks ago was supposed to suck around 16,000 crore rupees from the system ? By the way i like this phrase "suck money out of the system". It gives one the impression that CRR hike is actually going to have some effect :)

Thus the effect of the sixth pay commission, or rather, merely the effect of the arrears paid out by sixth pay commission will be more on inflation over the period of one year than the recent CRR hike by RBI. The impact would also be more direct on inflation, I think. And I am not even considering the impact of salary hike, merely arrears. I think the impact of salary hike will be even greater.

So is the sixth pay commission fair ? All i would like to say is that is a different debate. You cannot say it is unfair just because it is going to have an impact on inflation. The salary hikes that IT people or all private sector people have been gettting so consistently over the past decades surely also has had a comparable effect.


Related posts :

• Sixth pay commission : Calculate your new pay and smile :)