NEW DELHI: Gujarat and West Bengal have raised the red flag on the setting up of the 7th Pay Commission, saying it would lead to unwanted financial stress which they cannot afford.
The two states, which are leading the charge in the coming Lok Sabha elections with their chief ministers as prime ministerial candidates, have told the Centre that the revision of salaries would increase the burden on states and this would be most inopportune in view of global economic slowdown and debt condition.
While Gujarat said the central pay panel's recommendations have encouraged "contract employment" which is not governed by government salary structures, Bengal said the pay panel must evolve a mechanism to provide financial assistance to states to meet costs of salary review - 100% assistance in Bengal's case.
The objection to the pay panel is hardly a populist move given that the Congress-led Centre decided to announce it ahead of Lok Sabha elections to woo the voters.
Gujarat, whose CM Narendra Modi is the BJP's PM candidate, said the financial burden of the 7th Pay Commission would be substantial. It argued that drastic increase in expenditure because of pay revision would affect state finances.
In contrast to Gujarat's fear of pay panel hitting its revenue which is in surplus right now, the Bengal government has taken the opposite argument that it is already debt-stressed and cannot afford salary revision.
The Mamata Banerjee regime has demanded 100% financial assistance, fearing that constitution of the panel for central employees would put pressure on the state to follow suit.
Banerjee has never hidden the fact that Bengal's finances are in dire straits, blaming it on the previous Left Front regime, but opposition to the pay commission is not seen as a savvy move given that employees form a significant vote base that no political party would like to antagonize.
In fact, UPA has gone to the other extreme of wooing the vast serving and retired defence personnel by agreeing that the pay panel would separately review the salary structure of armed forces keeping in view of the uniqueness of their service conditions. It has already announced one-rank one-pension for armed forces.
Expressing helplessness on taking extra salary burden, Bengal has told the Centre that "it has not been able to grant dearness allowance to employees at par with central employees".
Speaking against the pay revision, Gujarat said constant hikes by pay commissions had caused labour market distortions vis-a-vis private sector salaries.
Also, it added that increasing salaries were forcing states to take recourse to "contract appointments", creating two sets of employees which was leading to social and legal problems.