The Centre held pre-budget interaction with states which demanded that central government bear 50 per cent of extra expenditure on pay revision of employees.
The demand, if accepted, will further aggravate the ballooning fiscal deficit of the Union Government.
"Most of the states have started implementing their own pay revision schemes following the Government of India's decision... All the states asked, for at least one year, if the 50 per cent of the additional burden can be borne by the Central Government," VAT Panel Chairman Asim Dasgupta said.
Last year, the Centre implemented Sixth Pay Commission report which hit the exchequer by Rs 22,100 crore for 2008-09.
Talking to reporters after the meeting, Dasgupta, who is also West Bengal Finance Minister said states placed their financial problems before Mukherjee.
They also sought freedom to go for additional market borrowings to help tackle the economic slowdown even if the current limit for fiscal prudence is breached.
At present, states are allowed to raise money from market only if their fiscal deficit remains below 3.5 per cent of their state's GDP. Now, they are demanding that this limit be raised or scrapped till the economic slowdown continues.
Mukherjee, however said, "High level of fiscal deficit are not sustainable in the medium to long term, both for the states and the Centre.
source:PTI
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The pay revision was due since a long time. Finally when the time came, the states don’t want to take responsibility. They chose to pass the buck to the centre. What a shame? Sometimes I wonder with the lack of funds still our ministers manage to create all sorts of scams in the country. They should really be sharing their success stories with the IIMs.
Ya its true.. The states also should take some responsibility. The central govt will not be able to handle burden from the states.