PATNA: A number of state government employees may be dissatisfied with the recent move of the state government to hike their salary in view of the Sixth Pay Commission recommendations, but market players are buoyant claiming that it would lead to growth in demands.
Incidentally, the government move would lead to a liquidity flow of about Rs 1,500 crore in the remaining period of the current fiscal and about Rs 4,500 crore from the next fiscal onwards.
“Government employees constitute a major chunk of our customer base. With more money in their pockets we are expecting a surge in demand for houses,” said Narendra Kumar, eastern region vice-president of the Builders Association of India (BIA).
He said things started to look up around two years back due to regular salary payment. “With a pay hike we can expect a further surge in this trend,” Kumar added.
A marketing officer of an automobile company, who requested anonymity, echoed Kumar. “Bihar is one of the few states which recorded increase in aggregate sale of automobiles even during economic slump. Infusion of more money into the system would further boost demand,” he said.
Similar were the views of those dealing in consumer durables. P K Agrawal, president of Bihar Chamber of Commerce (BCC), however, sounded a bit cautious. “Purchasing power will definitely go up but the amount spent on employees’ salary would put pressure on state finances as Bihar has a very limited option on revenue generation front,” he said.
Noted economist and member-secretary of the Asian Development Research Institute (ADRI) Shaibal Gupta said, “Bihar commands just 4 per cent of the total national trade and the existing situation would not give much leverage to the state government as far as replenishing the strain caused by the enhanced pay package is concerned.”
He said the state economy would be able to sustain this load if the Centre comes out with some substantial help. “The 13th Finance Commission can play a big role provided this aspect is taken care of in its recommendations to the Centre,” Gupta added.
Economist N K Choudhary echoed Gupta and said, “Government would have to live with this strain as state government employees cannot be denied benefits which are being given to staff of the Central government and those of other states.” He, however, was quick to add, “Government would have to think of long-term solutions like downsizing manpower and enhancing productivity.”
Source: timesofindia.indiatimes.com
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