Expenditure secretary Manoj Govil is hopeful that capital spending will gather pace and said the signs are visible already. In an interview to TOI he also said the 8th Pay Commission should be in place by April. Excerpts
Capex was lower than the budgeted level this year. One of the reasons was that Budget was approved in Aug. How to avoid such a situation?
The Budget was presented in July but it is because of activities associated with elections as states also reported lower capex during the first few months. The nature of the process is such that because of political activity and in part because of the model code of conduct, certain activities get slower. Officers and the staff are often drafted for election duty. But it generally picks up very fast. We have preliminary figures up to Jan. For April-Jan this year in terms of capex we are around Rs 30,000 crore more than the corresponding figure for April-Jan of the previous financial year, which did not have elections. We hope to reach close to or may be even surpass the revised estimate of Rs 10.18 lakh crore.
Have you factored in the impact of pay commission because the core salary hike will have to be implemented from Jan 1, 2026?
We have estimated that there will be no fiscal impact of the pay commission in the next financial year. After the pay commission is set up, it will take some time to submit its report, which will then have to be processed by govt. So in the next financial year, we do not expect an outgo. The outgo will be there in the financial year starting April 2026.
When do we expect pay commission to be set up?
We hope soon, may be in a couple of months, by April. We have asked the ministry of home affairs, defence and DoPT for their views on the draft terms of reference. Once we get their views and suggestions then the TOR will be framed, and approval will be sought from the Cabinet.
What will be the impact of the unified pension scheme, which is to be implemented from April?
The committee that looked at it said the financial implication for implementation will be Rs 6,250 crore a year. In addition, because UPS has been also allowed to the past retirees of NPS, the committee estimated that around Rs 800 crore will be required for arrears. Around Rs 7,000 crore is the first year requirement and the next year it will be Rs 6,250 crore plus because the pay scales keep on increasing as well as the DA keeps on increasing, so there might be some natural increase to that number.
Will most employees shift to UPS?
UPS is quite attractive because it provides full inflation utilisation. Otherwise, if a person under NPS has to buy an annuity, that may not be inflation protected. It is a choice-based system and the notification also says that a choice will be given to the employees.
Have states indicated their willingness to shift to UPS?
Some states have indicated that they will implement UPS even before the Gazette notification was out. PFRDA has issued draft regulations. Based on the comments received, the final regulations will be issued and then the process for asking for choice of the employees will start. Once govt of India’s rules are in place, many state govts will come on board. Once states are ready, PFRDA will create an appropriate mechanism for them also to set up a UPS for their employees.