Highlights of the Seventh Pay Commission Report

The Pay Commission report also recommends revised pension formation for civil employees including CAPF & defense personnel. Previously the maximum salary package stood at Rs 80,000.

Congress leader Ajay Maken on Saturday lampooned the newly recommended seventh pay commission.

The pay commission kept the retirement age of Central government employees unchanged based on many considerations including the large financial implications involved in implementing such a decision.

The pay commission, headed by Justice A.K. Mathur, submitted the 900-page report to Union finance minister Arun Jaitley at his residence.

The seventh pay commission has recommended a consolidated pay of Rs 4.5 lakh a month for heads of regulatory agencies dealing with telecom, capital and futures market, insurance, pensions, power and airports, which is twice the salary paid to secretaries.

All eyes are now on the wallets of government employees as auto companies, consumer goods majors and real estate players await a surge in demand, on the back of the pay panel’s proposal to raise salaries by 23.55%.

UBS analysts estimate 18 million people and around seven per cent of households will be directly affected by the pay commission’s recommendation, which influences wages of employees of state-owned firms, local bodies and India’s 29 states.

The commission this year has recommended a modest 16% increase in basic pay, 24% hike in pensions but allowance payout is set to increase by a substantial 63%.

Vivek Rae, a former IAS officer and member of the Pay Commission, disagreed with this recommendation.

“The CPC [Sixth Central Pay Commission] found that compensation to Group C and D employees in government was higher than that in the private sector; for Group B it was similar and only for Group A was it lower”, wrote analyst Sonalde Desai in The Hindu last month, making her point through the findings of the previous pay commission. They said many employees in big cities will prefer to buy a house and pay EMIs rather than live in a government accommodation due to the proposed increase in HRA. 02 lakh crore, of which 72% will be borne by the central government’s Budget and rest by the Railway Budget.

The panel has suggested abolition of the pay band and the grade pay, though it retained the annual increment of 3 percent.

This disparity of pay scale has bridged the resulting the Central employees working in the two states, Andhra and Telangana to go for stirke.

The 7 Central Pay Commission has also advised implementation of a new pension scheme on lines of one-rank-one-pension (OROP) model.