The idea behind this blog is to educate/help/enlighten and not to create controversy or to incite. The opinions and views expressed on this blog are purely personal. Please be soft in your language, respect Copyrights and provide credits/links wherever possible.The blog team indemnifies itself of any legal issues that may arise out of any information/ views posted by anyone on the blog.
Tuesday, March 1, 2016
7th CPC & OROP Allocation in Union Budget 2016-2017
After the Budget Speech, Arun Jaitley replied to a question about 7th CPC as below…
“Secretaries panel will decide the final burden on the government, a significant part of liabilities arising out of 7thCPC have already been factored in the Budget”, said Jaitley”
We looked into the Budget annexures to find the estimated allocation for 7th CPC and stumbled across the below while reading through the MACRO-ECONOMIC FRAMEWORK STATEMENT 2016-17 (file name: allfrbm.pdf) file which clearly has allocated the funds for OROP and 7th CPC.
The implementation of the Seventh Pay Commission due from 1st January, 2016 is to be implemented during the financial year 2016-17 as also the revised One Rank One pension scheme for the Defence services. The government has made provisions for the additional liabilities on these count.
On the plan side also a substantial increase of 15.3 per cent over RE 2015-16 has been provided for. This is unlike the previous financial year when on account of shrinking resources of the Centre on account of higher share of tax devolution to the States, the plan provision in BE 2015-16 was made with a marginal reduction over the revised estimates for 2014-15. In BE 2016-17 the total expenditure of the Government is estimated at about 13.1 per cent of GDP, thereby marking a marginal decrease over the RE 2015-16. This is against the increase in total expenditure of the Centre by 1.4 percentage points during 2008-09, when the Sixth Pay commission report was implemented.
In BE 2016-17, the estimated expenditure on pension payments is ` 1,23,368 crore, which works out to about 0.8 per cent of GDP. The substantial increase in pension payments in the ensuing year is due to the provision made for the implementation of the recommendations of the Seventh Pay Commission as well as additionality provided in Defence (Pensions) towards One Rank One Pension (OROP). The total expenditure on pensions in the medium term is estimated at about 0.7 per cent of GDP.
As the Honourable Members are aware, the Seventh Central Pay Commission has submitted its Report. Following the past practice, a Committee has been constituted to examine the Report and give its recommendations. In the meantime, I have made necessary interim provisions in the Budget.
This clearly shows there has been plans and allocation for the 7th CPC and OROP recommendation and time will tell when it would be implemented and how much.