The writer had referred the following references in his petition in the High Court :

1. Resolution dated 9-4-1994 appointing Fifth Central Pay Commission and the terms of reference and subsequent resolutions.
2. Letter dated 27-3-1997 to the Finance Minister and Finance Secretary by the writer with objections against report.
3. Arrears of concern and conclusion by the Commission, Chapter 34, paras 34.11 to 34.16
4. Financial Resources of the Central government, Chapter 35 of the Report.
5. Chapter 36 - Comparison with Public Sector.
6. Pages 175 to 179 from statistical outline of India, 1996-97 for Income-expenditure- Budget published by Tata Services Limited.
7. Chapter 170 date and effect and financial implications of recommendations.
8. Appendix III-A Short Note on inadequacy of data required for Pay Commission work.
9. Appendix IV Note of Dissent by Prof. Suresh Tendulkar, Member of Fifth Central Pay Commission.
10. Article by K. P. Joseph, published in Economic and Political weekly, March 22, 1997. Piped Music & Telephone attendants Report of Pay Commission" dated 22-3-97.
11. Article by Combat Soldier "Pay Commission Report is a blow to morale of the Armed Forces". Times of India dated 27/5/1997.
12. Military fumes over Pay Panel Report - Article by Bidanda M. Chengappa, Feb.5 Indian Express.
13. Editorial of the Times of India "Sins of Commission" published on 7th August 1997.
14. Leading Industry Association warning "Curb Borrowing to avert debt trap." Apex Chambers, dated 17/3/1997.

Let me repeat here that the Commission was specifically directed to make recommendations under the terms of Reference 1.13(c) after considering factors, namely :

"1.13(c) To make recommendations on each of the … for going to having regard other relevant factors to the prevailing pay structure and retirement benefits under State Government etc. economic condition in the country, the resources of the Central Government and demands thereon such as those on account of economic and social development, Defence and National Security and requirement of sound fiscal management."

The Commission did not specifically consider the above factors and requirement of the said factors and has given findings and conclusions in the Report in favour of the employees which are perverse, unreasonable in view of the following facts:

(a) Commission has reached the conclusion that the fiscal deficit as a proportion of G.D.P. rose from 6.4 to 9.00. In spite of the above findings, Commission has drawn a very rosy picture regarding condition of the country for coming decade. The Commission has ignored the paying capacity with regard to the year 1996-97 when Report was submitted in January 1997. The Commission has taken the base year 1993-94 and rosy picture of the future and concluded to give payments to employees which cannot be sustained.

(b) The Commission has taken base year 1993-94 and observed. "However, between 1985-86 and 1993-94, expenditure on wages and salaries as a percentage of revenue receipts seems to have increased somewhat from 19.3 to 19.5%. The expenditure as wages and salaries as a percentage of revenue expenditure on the other hand has fallen from 16% to 13.6^ in 1993-94. This indicates that other items of revenue expenditure during this period grow faster than the expenditure" The above findings is perverse and not supported by facts in view of following:

• Base year 1993-94 should not be taken but, 1996-97 year should have been taken for determining the paying capacity of the Government.

• The Commission ought to have taken net receipts of income after deducting the interest payment liabilities from the gross revenue receipts.

• The Commission has considered and has given figures of expenditure on pay and allowances for 1993-94 of Civilian Employees and Defence Employees in annexure 35.5 and 35.6 which mention Rs.7041.00 pay allowance Defence Employees and 14708.00 total expenditure on pay and allowances of Central Government Civilian - employees making total of Rs.21,749.00. Inspite of above figures the Commission has committed arithmetical mistake and has given figure of Rs.19,305.00 as total expenses on pay and allowances for year 1993-94 which is not correct. The said mistake has affected ultimate conclusion which can be seen from the following figures of pay and allowances for subsequent years :

1993-94 Rs.21749 crore ) Average increase of Rs.2000
1994-95 Rs.23749 crore ) crore per year in Pay allowances
1995-96 Rs.25749 crore ) and two interim relief and D.A.
1996-97 Rs.27749 crore ) installments.

(c) Figures of gross revenue receipts, gross interest payment liability, net revenue receipts and pay allowances of years and percentage of pay allowances of net receipts is tabulised as under :

The Commission has estimated 11500 crores for year 1997-98 for arrears of salaries and allowances to be given from 1-1-1996. The Central Government is inclined to give upto 13500 crores for year 1997-98.

The Central Government is borrowing every year so much that only interest payment liability has increased from Rs.26,000 crore in the year 1991-92 to Rs.68,000 crore in 1997-98. Interest payment liability is increasing at Rs.8,000 crore per year and wage bill as per the Commission Report is to increase Rs.8800 crore per year. Entire revenue receipts will be consumed in only two items namely interest payment liability and pay and allowances bill within three or four years, and India will face debt trap within three and four years and there will not be any surplus for Defence, subsidies and other plan and non-planned expenditure.

The Commission has failed to deduct amount and payment liability from gross revenue receipts. The Commission failed to note that interest payment liability is the first liability to be discharged by the Nation in order to remain the solvent Nation and avoid debt trap to the country. The Commission has taken gross revenue receipts and has not taken net revenue receipts and has not taken revenue receipts after deducting interest payment liability which has resulted in miscarriage to million of un-organized child labors and women. The writer recalls the warning of the Finance Minister Shri Manmohan Singh in his budget speech of 1991-92 vide para 28, 30 and para 49 of Budget Speech with regard to interest payment liability.

While recommending in paras 35.14 and 35.15 of the recommendations, the Commission has failed to consider total debts and interest payment liability and perversely observed that at the same time, lack of resources cannot be acted as our unalterable reason for denying the employees due.

The comparison of pay scales of private sector and public sector emoluments should not be basis for recommending increase of pay and allowances. It should be noted that employees in foreign companies can be fired out at any time and many of them are on contract basis and there is security of service pay scale of public sectors cannot be considered as the said companies are manufacturing companies and the said companies have not to spend on Defence and give subsidies to public which Government has to give. Moreover, the terms of reference do not permit the comparison of pay scales in private sector and public sector.

The Chairman Justice S.Ratnavel Pandian, former Judge of the Supreme Court of India and Member Secretary Shri M. K. Kaw, were directly beneficiaries of recommendations and so the said recommendations are liable to be set aside in view of the following facts and circumstances :

(a) The case of past pensioners is not referred to the Commission but the Commission has given the relief to past pensioners. A reference to the terms of reference of the Fourth Central Pay Commission and Fifth Central Pay Commission would throw more light about the Fifth Pay Commission exceeding its terms of reference. The Member Secretary of the Commission is directly beneficiary of the recommendations which are made for I.A.S. Officers and the said recommendations are commented in the Article "Pipe/Music and Telephone Attendant Report of Fifth Pay Commission by K. P. Joseph.
(b) The IAS Officers are given treatment with regard to special telephone attendant Rs.1500 per month, hundred percent neutralization of inflation with regard to I.A.S. Officers and other officers and in promotion policy which is mentioned in para 11, Appendix I - Summary of Recommendations.
(c) Prof. Tendulkar, Member of Commission submitted a Note of Dissent on recommendations, mainly :

(1) Resources and fiscal deficit
(2) Retirement age extending from 58 years to 60;
(3) Housing facilities - Allowances
(4) Leave Travel Concession
(5) Income Tax Exemption
(6) Dearness Allowance
(7) Resident Telephone Attendant.

At present, the Central Government has incurred Foreign Debt of Rs.92000 Million Dollars and internal Debt Rs.390132 crores (1996-97 budget) and there is Rs.65,000 crore fiscal deficit. All State Governments and State Electricity Boards are in deficit. Upon acceptance of the recommendations employees of State Government, Local Authorities and Corporations will make the same demands and it will not be possible to resist the demands. The nation will be in the debt trap like Mexico within three or four years as new taxes are not levied for more than 2000 crore every year there will be new liability of 16,800 crore (Rs.8000 crore) interest liability and Rs.8800 crore pay and allowances.

The Commission has given reasons for increasing pay allowance in Chapter 35 "Financial resources of the Central Government" - vide paras 33.12 to 35.15, as follows :

"At the same time lack of resources cannot be cited as an unalterable reason by denying the employees their dues, Government itself it partly to blame by its act of lifting the lid of private sector emoluments. It has also not shown circumspection while approving wage revisions of the Public Sector probably due to pressure of employees' Union in the case of certain high wage islands like Airlines Pilots, the Government had gone berserk. With this inevitable record, it can hardly preach abstinence and forbearance to its employees".

"We have suggested certain measures for right sizing of the Government machinery. If the Government is serious about containing the deficit it will implement these recommendations with rigour and single mindness. In the case, members can be brought down, Government can very well afford to pay its employees a decent salary".

Above entire reasoning is perverse. As pointed out earlier to the Finance Minister, that the employees of Foreign Companies cannot be compared as they are mostly on contract base and can be removed at any time. The scale and allowances of Public Sector Companies cannot be compared as said companies are manufacturing companies they have not to pay for Defence, subsidies and other development work, health, education and social services. In fact terms of reference prohibit to refer the condition of employees serving in public sector.

The entire prosperity and purchasing power is confined to six crore people of India which includes two crore seventy lacs organized employees, plus professional and businessmen plus rich agriculturists who are not liable to pay Income Tax and taking four members of each family of above persons prosperity and purchasing power is confined to 24 crore people. That 37 crore people are living below poverty line and 27 crore un-organized labor and 3 crore child labor will not be able to survive as there is no simultaneous machinery for increase of minimum wages and implementation of the said minimum wages. There are about three crore unemployed persons in India. The Central Government employees are only 40 lacs out of total population of 93 crore and the said employees are likely to consume 45% of net revenue of the Central Government, if recommendations of the Fifth Central Pay Commission are implemented. There will be violation of Fundamental Rights guaranteed under Articles 14 and 21 so also violation of directive principles of State policies mentioned in Article 38, 39(a)(b)(d), and Article 43 of the Constitution of India.

After five years of implementation of the Central Fifth Pay Commission Report, the following are the figures of the Pay Bill of Central Government and the State Government :

and Dearness Allowance which was 12% of basic pay has increased to 59% of basic pay. The pension Bill of the Central Government which was Rs.3211 Crores in 1991-92 has increased to Rs.24000 crores for about 38 lakhs pensioners. The Central Government could not give exact number of pensioners and number of family pensioners before the Commission. The subject of Pension has been dealt exhaustively in separate Chapter which the reader may refer.