Govt did balancing act in revising pay scale, Omicron may further hit economy: Chief secy

By Express News Service

VIJAYAWADA: Chief Secretary Sameer Sharma on Wednesday asserted that the government had done a fine balancing act while deciding on the revised pay scale of government employees as per the Pay Revision Commission (PRC) in spite of the State revenues hit by the Covid-19 pandemic. 

Addressing mediapersons along with Finance Principal Secretary Shamsher Singh Rawat and other officials, he said if not for the Covid pandemic, the State own revenues would have been Rs 98,000 crore instead of Rs 62,000 crore. Andhra Pradesh has the highest Human Resource expenditure in the country. The State HR expenditure of the total expenditure rose from 32% in 2018-19  to 36% in 2020-21, he pointed out.

“Now, we are facing another big threat from the Omicron variant, which may have its impact on the State economy. In the given financial situation, there is a need for maintaining a balance and that is what the government is doing now. You would always say more could be given, but something has to be taken away from somewhere. If you look at the system, there are different sections of people, whose needs have to be met and with available resources a balance has to be ensured. We have optimised at the best,” the Chief Secretary explained and emphasised the need for looking holistically at the entire issue
According to the Chief Secretary, Chief Minister YS Jagan Mohan Reddy has considered every aspect before taking the final decision on the PRC after recommendations from the committee of secretaries. He maintained that consultations with employees’ unions were held in this regard and asserted that at the end of the day, gross salaries will be more and not less as claimed by the staff.

Adjustment of HRA will not impact gross salary, says Principal Secretary

Sharma pointed out that despite the Covid pandemic, employees’ interests were given top priority and 27% of Interim Relief was given, which cost the State exchequer Rs 17,000 crore.  He maintained that IR is never a part of the PRC. On the issue of HRA, he said something will increase and something will decrease to maintain a balance. Besides 23% fitment, employees are getting DA at a time. The increase in retirement age will be the biggest benefit to employees, the Chief Secretary said. 

Principal Secretary (Finance) Rawat said management of State finances is not much different from individual and family finances as amounts need to be allocated as per priority while maintaining a fine balance. Explaining the fall out of State bifurcation, he said from an emerging industrial and service economy, AP was relegated to being an agrarian economy, which is a low revenue earner.  

“The per capita income of AP in 2020-21 was Rs 1,70,215, the lowest in Southern States,  compared to neighbouring Telangana’s Rs 2,37,632. Further, the State lost Rs 1,80,000 crore during 2015-20 due to loss of capital city (Hyderabad),” he elaborated, and also mentioned the pending dues from Telangana and the Centre, including revenue deficit grant.

According to the Principal Finance Secretary, the State had a revenue deficit of Rs 34,927 crore and fiscal deficit of Rs 54,370 crore in 2020-21. The Covid pandemic had resulted in a revenue loss of Rs 21,933 crore and an additional expenditure of Rs 30,000 crore. The tax revenue fell from Rs 62,473 crore in 2018-19 to Rs 60,688 crore in 2020-21, he explained.

Principal Secretary (Finance – Services) Shashi Bushan Kumar said fitment from 1974 to 1993 was sanctioned as per the PRC recommendations and from 1999 more than recommended fitment was given. 

“A 23% fitment was given against 14.29% recommended by the committee of secretaries, which costs Rs 70,424 crore to the exchequer. HRA slabs were adjusted on par with the Central staff and likewise CCA was discontinued and additional quantum of pension too was in tune with the CPRC. All India Services also removed Rs 40,000 slab,” he explained.  

He maintained that adjustment of HRA will not impact the gross salary and it will be more than what they are getting now with IR. “Most importantly enhancement of retirement age from 60 to 62 years will be a great benefit to employees. If the average salary of Rs 1 lakh per month is taken into consideration from 60 to 62 years, it will fetch Rs 24 lakh more.

The average pension of Rs 40,000 per month if he retired at 60 years will be Rs 9,60,000, so the average net benefit for an employee in two years is Rs 14.4 lakh. Further each employee will get an additional four DAs and two increments. Pension after retirement will also increase on account of higher last drawn salary,” he added.

‘AP’s HR expenditure highest’

AP has the highest Human Resource expenditure in the country. The State HR expenditure of the total expenditure had increased from 32% in 2018-19 to 36% in 2020-21, Chief Secretary said


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