Those in babudom might be feeling the heat of inflation and price rise as much as those out of babudom. The difference is - babus are hoping that pay commission will relieve them a bit...But hold on! Such high inflation is bad news to very prospects of implementation of pay commission. How!! well look at this way... pay commission recommendation are based certain calculations of growth specially of GDP. But that was before this very sorry patch of high price rise. The fact is as per the CPC the raise was recommended considering the high estimates of growth.  Raghvan states:

As regards the Sixth Pay Commission, assuming a real GDP growth rate of 8.5 per cent and an annual inflation rate of 4.5 per cent in 2008-09, the official spokespersons have put the impact at around 0.4 per cent (or Rs 21,215 crore) of the GDP estimated at Rs 53,03,770 crore.

Now everyone knows that these figures have fallen apart, neither the growth figure will match nor the inflation can be expected to come down to 4.5%. In essence it means that after petrol hike and subsidies that some of the state governments declared, it will be impossible for them to replicate the central pay they are likely to dissuade the center. Raghvan predicts that if center decides to implement may result in states going bankrupt.. some already believe that we are on the verge of financial emergency. So bad patch of economy despite the elections is bad news for babus.


Related Posts