Seventh Pay Commission report on salary hikes likely today

The commission recommended 23.55 per cent increase in salary, allowances and pensions with a minimum pay of Rs 18,000 and a maximum of Rs 2.5 lakh per month to the Central Government employees.

Expressing confidence that the fiscal deficit target will be met, Economic Affairs Secretary Shaktikanta Das said the Seventh Pay Commission’s report was expected and the government knew it will take effect from January 1, 2016. This adds up to Rs 1.02 lakh crore in FY16, which will have a financial impact of Rs 73,650 crore on Union Budget and Rs 28,450 crore on Railway Budget.

Putting an end to all speculations, the seventh pay commission submitted its report to Finance Minister Arun Jaitley on Thursday, Nov 19. During the year 2008, an increase of 35% in the pay scale of Central Government employees was recommended by the then Pay Commission, which was accepted by the Government.

The House Rent Allowance granted to central government employees has also been increased; it will now be paid at the rate of 24%, 16% and 8% of the new Basic Pay for Class X, Y and Z cities respectively.

“The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, an increase of almost 23.55 per cent over the business as usual scenario”, the 7th Pay Commission report said. The previous 6th Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.

S&P said the implementation of the pay panel recommendations would “put pressure on the fiscal position of the government and would act as a constraint to stick to the road map for fiscal consolidation”.

The 7 Pay Commission was initiated in February 2014 by the UPA Government with the aim of revising the remuneration of pensioners and Central Government employees.

It has further recommended that 52 allowances be done away with altogether and another 36 be abolished as separate identities, but subsumed either in an existing allowance or in the newly-proposed allowances.

Talking to the reporters he has said, “Like the return of black money and giving Rs 15-20 lakh to poor out of it and providing enhanced Minimum Support Price (MSP) to farmers, which will be one-and-half times of the input cost, the OROP also seems merely a “jumla” by the PM”.

It’s time for government employees to celebrate. And the same will be raised by 25 percent whenever DA be raised by 50 percent. All postal pensioners must be covered under CGHS. As of now this is controlled by IAS officers and has no representation from any other service. All postal dispensaries should be merged with CGHS.

Past hikes have helped savings more than spending, economists say, but more cash in consumers’ pockets should boost automakers and white goods manufacturers.