The Tamil Nadu Government has announced wage revision for its employees and pensioners in line with the recommendations of the Sixth Pay Commission.
The pay revision representing an additional outgo of Rs 5,155.79 crore will be effective notionally from January 1, 2006, with the monetary benefit accruing from January 1, 2007, according to the Finance Secretary, Mr K. Gnanadesikan.
This will mean an arrear payout of Rs 11,093 crore to be paid in three equal annual instalments beginning from the current year. The revised pay-scales, effectively a hike of about 25 per cent and a doubling of allowances, will benefit over 12 lakh State Government employees and over 6 lakh pensioners and family pensioners.
As of now, the State Government pays over Rs 21,000 crore a year as salary (Rs 14,000 crore) and pension (Rs 7,000 crore) and this expenditure is set to increase to about Rs 26,000 crore. This would mean that over 45 per cent of the State’s annual revenue of Rs 59,000 crore would be spent on salaries and pensions. However, the State Government has factored in the additional expenditure into the budget, he said.
The wage hike comes at a time when the State Government is facing a fall in revenue as a result of the economic slowdown, which has hit tax earnings. Commercial tax earnings have stagnated and stamp duty earning has declined by about a third as property transactions were hit, he said. The State Government is optimistic that there could be a recovery in the first quarter of 2010, he said.
Source: http://www.thehindubusinessline.com/2009/06/01/stories/2009060150631300.htm
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