Mumbai: The government has constituted a high-level committee comprising secretaries of various departments to review the report of the sixth pay commission amidst sharp criticism from the armed forces, police and government employees.

The `empowered committee of secretaries' will be headed by cabinet secretary K M Chandrasekhar, science and technology minister Kapil Sibal said after the cabinet meeting.

The committee will screen the pay commission's report and submit its final recommendations to the cabinet for approval, Sibal said.

The government has, meanwhile, set up  a committee headed by finance secretary D Subbarao to look into the grievances of armed forces and IPS officers. 

The pay panel report had recommended an average 40 per cent hike in pay packets, which is considered 'inadequate' by employee associations. The panel had suggested a pay packet of Rs90,000 for the top bureaucrat and Rs80,000 for secretaries.

The pay panel recommendations, which will benefit more than 3 million central government employees, were expected to cost  the exchequer over Rs12,000 crore annually.

The increase in wages could also derail the governments plans to limit the fiscal deficit at 2.5 per cent of the country's gross domestic product in 2008-09, against 3.1 per cent in 2007-08.