New Delhi, June 29 (IANS) India Inc on Wednesday said the nod to most of the recommendations of the Seventh Pay Commission will boost consumer demand and lift the economy even as some concern was expressed over its impact on prices and the government’s deficit.
Reacting to the decision taken at a Cabinet meeting, presided over by Prime Minister Narendra Modi, the three apex chambers were particularly looking forward to a positive impact from the Rs 1.02 lakh crore ($15 billion) that is expected to enter the economy.
Here is what they said:
Didar Singh, Secretary General, Federation of Indian Chambers of Commerce and Industry (Ficci):
The pay hike of nearly Rs 1 lakh crore for government employees will give a strong boost to the consumer demand and help uplift the growth of the economy. This combined with continued public push to capital expenditure will help steer the economy to higher growth levels of 8 per cent and above, which is much needed amidst the current global headwinds.D.S. Rawat, Secretary General, Associated Chambers of Commerce of India (Assocham):
The Cabinet decision to implement the 7th Pay Commission recommendations would have a positive impact in the short to medium term, as the extra money in the hands of a large number of salaried earning people would lead to higher consumption and demand driven economic growth. If the monsoon plays out as per the forecast, the increase in both urban and rural consumption should be a great help to sectors like automobile, consumer finance, fast moving consumer goods (FMCG), housing and other discretionary sectors.
Chandrajit Banerjee, Director General, Confederation of Indian Industry:
The implementation of pay commission award would lead to a hike in salaries of 4.7 million central government employees. It would be a great mood elevator for the middle class which would rev up consumer sentiment and in the process provide a big boost to the economy and industry.
Devendra Pant, Chief Economist, India Ratings and Research:
We believe the impact of pay revision of government employees will be felt only in 2017-18. The Seventh Central Pay Commission award is expected to be less severe on state finances than expected earlier due to a lower arrear pay out. It also does not see any immediate threat to inflation.
Ankur Dhawan, Chief Business Officer, PropTiger:
The Seventh Pay Commission implementation will be a positive move and raise the affordability of the government employees by increasing their home loan eligibility. The developers would come up with schemes to make it attractive for public sector employees to invest in realty sector after this approval.
Vineet Relia, Managing Director, SARE Homes:
The revised slabs would help to flush in more liquidity in the market by broadening the channel of purchasing capacity of nearly one crore employees in India. The raise would definitely have a ripple effect on private sector too.
C.M. Singh, Chief Operating Officer, Videocon:
This move will certainly have an impact on the sales and trigger purchases. Favouring a tilt in demand for premium products, we expect the new age technologies segment to boost our business.