ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Demographic and Social Changes: Issues for the Sixth Central Pay Commission

Inadequate synchronisation of central government service and superannuation rules with a favourable demographic structure and social developments may adversely affect labour and effort of government employees. A slowdown in fresh recruitment has had a negative impact on the system-dependency ratio and the improvement in age-dependency has not resulted in economic benefits. Some recent decisions may exacerbate both inter- and intra-generational equity concerns in employees' compensation. These may have implications for the cost and quality of public services.

Government Employment and Employees' Compensation

By 2004-05, as compared to 1950-51, the compensation structure of central government employees had gravitated substantially towards deferred payments. Though the average wage compensation of a central government worker is higher than the per worker gross domestic product, the latter has grown at a faster rate in the past few years. The number of central government workers has been declining and the aggregate expenditure towards employee compensation as a proportion of net non-debt revenue receipts has also fallen. Hence, at the aggregate level, there is no grave concern regarding the fiscal implications of wage and retirement benefits
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