This accordingly puts the basic pay at a much higher level than that provided in the Fifth Pay Commission and the effective increase over that level is 28 per cent, a top Commission official said. The government increases the DA of its employees every six months to compensate them for rising costs of living. Among other things, the Sixth Pay Commission has also suggested that the government should revise the base year of the Consumer Price Index (CPI) for computation of DA “as frequently as feasible”. It has further recommended that a separate CPI should be prepared by the National Statistical Commission for computation of DA for government employees.

The Sixth Pay Commission on Monday recommended an increase in salaries of over 4 million Central government employees, a move that would cost the exchequer Rs 12,561 crore in fiscal 2008-09. The Commission, headed by Justice B N Srikrishna, has recommended implementation of the revised pay from January 1, 2006, which would impose a one-time arrear payout burden of Rs 18,060 crore on the government.

While finance minister P Chidambaram did not announce any provision in the Budget for the increased wage bill in 2008-09, he maintained that there was enough head-room to meet the additional expenditure. Recognising the hardships faced by defence personnel, the panel put the military services’ pay on par with that recommended for civilians, while suggesting an allowance of Rs 6,000 per month for officers till the rank of Brigadier and equivalent.