Salary, pension costs set to grow 15.8% and 16%, respectively, in FY17, leaving govt less money to build capital assets
New Delhi: The finance ministry is apprehensive about the recommendations of the Seventh Pay Commission, expected this month, significantly increasing the revenue expenditure of the government in the next fiscal, leaving it less money to spend on building capital assets.
In the medium-term expenditure framework statement laid before Parliament on Wednesday, the finance ministry said salary and pension expenditure is expected to rise by 15.8% and 16%, respectively, in 2016-17, which may leave capital expenditure room to grow by no more than 8% during the year.
Total revenue expenditure is expected to jump 8.1% to Rs.16.6 trillion in 2016-17 against a budgeted growth of 3.1% in 2015-16. During the same period, growth in capital expenditure is expected to slow to 8%, at Rs.2.6 trillion, from a budgeted growth of 25.4%.
The finance ministry said award of the Seventh Pay Commission’s suggestions, with their consequent impact on government finances, “poses a risk”.