Will review fiscal situation if oil prices increase, says Finance Secretary. Finance Secretary Ashok Lavasa, who is heading the committee to review the Seventh Pay Commission’s recommendations on allowances, said the panel will finalise its report in four months. He also expressed confidence that the Centre’s fiscal deficit target will not be impacted by the implementation of higher salaries and pensions.“The (fiscal) situation is comfortable. If oil prices increase, we will see,” he said. Excerpts from his interaction with the media:
By when will a decision on allowances be taken?
A committee has been set up which will look into the issue. It has a timeline of four months. As of now, there is no decision on when the revised allowances will be implemented from.
Will there be a need to review the fiscal situation if oil prices increase?
As of now, the situation is comfortable. If oil prices increase, we will see.
Will the additional money in the economy increase inflationary pressures?
The financial impact is about ₹84,933 crore and this money will come into the market and it can be savings or used for consumption.
Either ways, there will be an increase in money supply and there will be some inflation. This is basic economic principle.
Will you be talking to worker unions who have expressed dissatisfaction?
The Cabinet has just made its decision. If the need arises, we will look into the concerns.
(This article was published on June 29, 2016)