Seventh pay commission’s Report to be Implemented before state election

 Delhi: Ahead of the states’ assembly elections in May’ 2016, the Central government may implement the recommendations of the Seventh Pay Commission after receiving the report of the pay panel within this year, which will benefit 50 lakh central government employees and 56 lakh pensioners including dependents.

“The central government will decide execution time of the pay commission’s proposals after the pay panel submits its report, which will be possible pre-election “special packages” for West Bengal, Assam, Kerala and Tamil Nadu, which are all due for polls by May 2016,” an official of the Finance Ministry said, speaking on condition of anonymity.

Just like one rank one pension (OROP) was announced by Modi government on 5th of this month ahead of Bihar Assembly election despite huge financial burden to get majority seats of his party in Bihar Assembly.

OROP announcement not only is pre-election BJP’s special package but also Union cabinet approved six percent increase in DA for central government employees on Wednesday, making the total to 119 percent, on a day the Election Commission announced poll dates for Bihar is a move that would benefit the BJP in Bihar Assembly Election.

Accordingly, JD (U) leader K C Tyagi said, “The Modi government gave a ‘political bribe’ to voters. I welcome the DA hike for central government employees, but, I feel the, timing of the announcement is not correct.”

BJP needs to win most state elections in the next four years to gain control of the Rajya Sabha, where seats are distributed based on the strength of parties in state assemblies.

A defeat for Prime Minister Narendra Modi would harm his chances of consolidating power in parliament, where his reform agenda is being blocked because his party is in the minority in the Rajya Sabha.

So, Modi led BJP government is ready to give any sop to win states assemblies electons.

Finance Minister Arun Jaitley said on August 30, that report of Seventh Pay Commission for central government employees was coming shortly.

However, Chairman of the Seventh Pay Commission, Justice Ashok Kumar Mathur told PTI on August 25, “The Commission will submit its report by the end of September.”

Now, it is expected that recommendations of Seventh Pay Commission, will be implemented before the announcement of West Bengal, Assam, Kerala and Tamil Nadu states assemblies’ election in May 2016.

The Seventh Pay Commission, which was set up by the UPA government, was required to submit its report by August-end.The government constitutes the Pay Commission almost every 10 years to revise the pay scale of its employees and often these are adopted by states after some modifications.

The Commission has already completed discussions with various stakeholders, including organisations, federations, groups representing civil employees as well as Defence services and is in the process of finalising its recommendations.

The recommendations of the Seventh Pay Commission are scheduled to come into effect from January 1, 2016.

The Sixth Pay Commission was implemented with effect from January 1, 2006, the fifth from January 1, 1996 and the fourth from January 1, 1986.

Source: http://www.tkbsen.in/

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Are drug companies behind the move?
Drug companies, no doubt, are happy. Their argument is that the 108 drugs mostly relate to lifestyle diseases and are not 'essential'. One drug company executive said pharma companies themselves have volunteered to keep prices of 800 essential drugs as low as possible. Also, he asks, "In a free market, how can a regulator control prices."

So now, will the prices of all 108 drugs go up?
No, say officials. "The government has only taken the powers of NPPA and kept them with it. The government will negotiate with pharma companies to keep prices low. The aim is to cut through red tapism," said a senior official in the ministry of chemicals and fertilisers.

Why did the govt do it, in the first place?
The government decided to empower itself to deal with the pricing of some limited and non-essential drugs. Instead of seeing this as a favour to pharmaceutical companies, it should be seen as an encouragement for them to invest and spend on R&Ds.

But surely some pharma firms might have benefitted?
Definitely. Subsequent to the new move, 0.7 per cent of the combined sales of Sun Pharma and Ranbaxy in India will be out of price control. The corresponding figures for Torrent and Lupin will be 1.5 per cent and 0.7 per cent, respectively. Soon after the government decision, share prices of pharma companies shot up. Sun Pharma and Ranbaxy gained nearly 2 per cent and GSK Pharma and Davis Lab gained 1 per cent each. Glenmark was also up around 1 per cent.

What's the anti-decontrol group saying?
Former Union minister for chemicals and fertilisers Srikant Jena alleges that the timing of decontrol smacks of a plot to help multinational pharmaceutical companies, mostly headquartered in the US, to earn bumper profits. He said the decision seems to have been taken to let Prime Minister Narendra Modi earn some brownie points while interacting with top US officials and company executives.

Weren't these drugs under price control regime earlier?
The Ministry of chemicals and fertilisers had, on May 30, 2013, delegated powers to the NPPA to regulate the prices of life-saving drugs. This resulted in a significant reduction in prices of a broad spectrum of drugs. The Modi government extended this regulation to even lifesaving drugs for cancer, HIV, tuberculosis, malaria, diabetes, cardiovascular diseases and asthma. The government later withdrew these guidelines, ahead of Modi's visit to the US.