7th CPC might play vital role in the economic development of Tripura : Economists By-Kiran Bhowmik

Agartala, Jul 4 : The economy of Tripura is likely to get an upward push as the implementation of Seventh Central Pay Commission (7th CPC) in the state is expected to pump more money into circulation, believes a section of economists.
In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply.
Referring to Say’s Law which states ‘Supply creates its own demand’, Professor Arunoday Saha, economist and former vice-chancellor of Tripura University, told UNI that the 7th CPC will help to create an additional demand for goods and services. Rise in demand for goods and services will help in the expansion of the state’s economy, he added.
Keeping with the biggest pre-poll promise BJP had made in its”vision document”, Finance Minister of Tripura Jishnu Debbarma confirmed in his first budget speech in the Assembly on June 19 last that the state government has earmarked Rs 1000 crore to meet the cost of 7th CPC recommendations.
While the Central government employees had been enjoying the benefits of 7th CPC, the new recommendations were not implemented by the erstwhile Left front government. Instead it had increased the salaries by 20 per cent which had apparently failed to appease the workers.
Some economists think that the state economy will get some push, once people get more money to meet their unfulfilled needs.
“With the hike in salaries of state government employees, increased supply of money is expected to bolster the demand for more goods and services, thus supplying all the ingredients for Say’s law to come into effect,” Professor Saha pointed out.
“If the demand for goods will increase, the production of goods will increase. More production in the economy increases the momentum of development,”he further explained.
Dr. Debasis Neogi, Associate Professor of NIT Agartala, Department of Humanities & Social Sciences is also of the same view. “7th CPC will raise the income of state government employees and consequently help to increase money supply in Tripura. This in turn will multiply demand for goods and services,” he told this correspondent.
According to Dr Neogi, 7th CPC will also benefit the government as increased spendings will shoot up the revenue collections under GST. “If a person purchases more goods, the income from GST will increase which can be used by the government in developmental activities in Tripura,”he elaborated.
The 7th CPC will be implemented after the three-member committee headed by former Assam chief secretary P P Verma submits its report. After coming into power, Chief Minister Biplab Deb had formed the committee in the first meeting of council of ministers to oversee the implementation of the 7th CPC proposals.
Over 2.5 lakh state government employees and pensioners will be benefited by the implementation of the 7th CPC recommendations.
UNI.