BE READY FOR UNITED STRUGGLE FOR GETTING DA.

Freezing of DA to employees and DR to Pensioners, Govt. will enforce further economy measures to off-set any increase: Finance Commission

Freezing of DA to employees and DR to Pensioners, Govt. will enforce further economy measures to off-set any increase: Finance Commission FINANCE COM

Freezing of DA to employees and DR to Pensioners, Govt. will enforce further economy measures to off-set any increase: Finance Commission

FINANCE COMMISSION IN COVID TIMES
REPORT FOR 2021-26

Chapter 4
Pandemic Times: Analysis for the Future 2021-26

Pensions and Salaries

4.40 The Government of India has, as of now, frozen the dearness allowance to its employees and dearness relief to its pensioners due from January 2020 to July 2021, clarifying that this will be restored only prospectively. Based on this decision, we do not expect any growth in the salary requirements for 2020-21 over 2019-20. In view of the strain on revenues, for 2021-22 also we expect that the Union Government will enforce suitable economy measures in its committed expenditures to off-set any increase on account of dearness and other allowances. Accordingly, we have factored in a growth rate of 1 per cent in salaries and 1.5 per cent in pensions in these two years (2020-21 and 2021-22). Thereafter, we have employed an annual growth of 5 per cent in salaries and 5.5 per cent in pensions, keeping in mind the need for annual increment of employees, dearness allowance/relief of employees and pensioners and the normatively assessed change due to attrition in the workforce. We also expect that the expenditure on government workforce will be prudently rationalised, with emphasis on functional efficiency, to stay within the means. Our projections are presented at Annex 4.1.

Assessment of Union Government Finances for the Award Period of the FC-XV

(Rs. crore)

	2020-21 (BE)	2020-21 (Reassessed)	2021-22	2022-23	2023-24	2024-25	2025-26
Gross Revenue Receipts	2808037	2135156	2429405	2684206	2999062	3381073	3841641
Gross Tax Revenue	2423020	1876118	2135398	2362270	2643322	2986200	3401357
Corporation Tax	681000	490050	559515	623300	701836	798338	917690
Income Tax	638000	443444	509295	567354	641820	737130	855808
Customs Duties	138000	101893	117024	129253	144182	163214	185737
Union Excise Duties	267000	295639	323577	345095	370459	398984	431103
Service tax	1020	–	–	–	–	–	–
Goods and Services Tax	690500	541310	621694	692567	779831	882768	1004590
Other Taxes	7500	3782	4293	4701	5194	5766	6429
Non-Tax Revenues	385017	259038	294007	321936	355740	394873	440284
Interest Receipts	11042	11042	11042	11042	11042	11042	11042
Dividends and Profits	65747	33411	37921	41523	45883	50931	56788
Dividend/Surplus from RBI	89649	89649	101751	111417	123116	136659	152375
Petroleum	14075	11131	12633	13833	15286	16967	18919
Telecommunication	133027	69846	70000	70000	65000	60000	60000
Other Non Tax Revenues	71477	43959	60660	74121	95413	119274	141160
Divisible pool	1913731	1399846	1606318	1786897	2010695	2284310	2616072
Tax Share to States	784181	573937	658591	732628	824385	936567	1072589
NCCD Transfer to NCCF/NDRF	2930	2930	2930	2930	2930	2930	2930
Net Revenues to the Centre	2020926	1558288	1767884	1948650	2171747	2441576	2766120
Revenue Expenditure	2630145	2690145	2838995	3011135	3191617	3406586	3679145
General services	1270606	1216748	1313527	1424012	1538544	1656171	1776717
Interest Payments	708203	678635	760156	838425	917018	995750	1074093
Defence revenue expenditure	209319	209319	220832	235722	252659	271501	292543
Pensions	210682	186392	189188	199593	210571	222152	234371
Police	93597	93597	94346	99252	105008	111099	117542
Fiscal Services	18780	18780	18857	19688	20556	21463	22409
External Affairs	8876	8876	8912	9411	10104	10848	11647
Other general services	21149	21149	21236	21921	22628	23358	24112
Social Services	125274	156214	165751	182608	203825	227805	254941
Health	30940	61880	71169	82599	95866	111264	129135
Other Social Services	94334	94334	94582	100009	107959	116541	125806
Economic Services (excluding subsidy)	228315	287075	274904	282770	300749	319337	338437
Transport and Communication	37021	37021	37073	39245	42555	46145	50037
Science, Technology & Environment	30516	30516	30559	32349	35078	38037	41245
Export Promotion	2256	2256	2259	2391	2593	2811	3049
Power	13392	13392	13411	14197	15395	16693	18101
Other economic services	145130	203890	191602	194588	205128	215651	226005
Subsidy	262109	312109	314148	322093	332615	343307	355340
Food	115570	165570	187003	194484	202263	210353	218768
Others	146539	146539	127145	127609	130352	132954	136572
Grants-in-Aid to State Governments Recommended by Finance Commission	149925	196449	233279	227846	198012	190203	183722
Revenue deficit grants	30000	74340	118452	86201	51673	24483	13705
Disaster relief grants to States	20000	22184	22184	23294	24466	25688	26969
Grants to local government to States	99925	99925	80297	84703	87181	92087	92093
Sector-specific grant	–	–	12346	23729	24773	33062	36077
State-specific grant	–	–	–	9919	9919	14883	14878
Provision for other transfers (expected) to States**, of which	511500	439134	444485	468941	503198	541173	625050
GST compensation to States	127440	93480	90189	100474	112623	127163	186199
Grants-in-Aid to Union Territories	47258	47258	54228	60324	67879	77116	88316
Other revenue expenditure	35158	35158	38673	42541	46795	51474	56622
Capital Expenditure	412085	352085	369269	357910	401577	450192	485619
Non-Debt Capital Receipts	224967	68620	138345	113478	108589	103657	98754
Revenue Deficit/Surplus(-)	609219	1131857	1071111	1062485	1019870	965011	913022
Fiscal Deficit/Surplus(-)	796337	1415322	1302035	1306918	1312858	1311545	1299887
Adjusted Outstanding Debt*	10676357	11400438	12673209	14026621	15406827	16777522	18105890
GDP	22489420	19119458	21700585	23762140	26257165	29145453	32497181

Note: (*) The adjusted outstanding liabilities presented in the table are equal to the outstanding liabilities, minus the State borrowing from NSSF, minus cash balances minus Central loans to State Government plus extra budgetary resources and finally adjusted for external debt at current exchange rate.

(**) Includes transfers made through functional heads also. The functional heads have been adjusted to this extent.

Source: Finance Commission Report