Published On: Wed, Jan 6th, 2016

FM Jaitley commits to fund Pay Commission Award in next budget

New Delhi: Finance Minister Arun Jaitley committed Tuesday to finding the money needed to implement the Seventh Pay Commission Award in the next budget 2016-17.

Finance Minister Arun Jaitley

Finance Minister Arun Jaitley said that the money needed to implement the Seventh Pay Commission Award will be allocated in the next budget 2016-17.

“The government ready to allot fund for the Seventh Pay Commission Award in the next budget in spite of the additional expenditure burden of nearly Rs 1 lakh crore due to One Rank One Pension (OROP) and its award,” Jaitley said at the foundation day of India Infrastructure Finance Company in New Delhi.

Jaitley’s commitment to spend next year comes at a time when the government has cut its own gross domestic product (GDP) growth estimates for the year to 7-7.5 per cent from 8.1-8.5 per cent. The government may also take a re-look at the medium-term fiscal consolidation road map.

In his mid-year economic analysis in December, Chief Economic Advisor Arvind Subramanian had said there was a need to re-assess the fiscal deficit target of 3.5 per cent for 2016-17 due to additional expenditure for OROP and pay commission.

The additional burden due to the Seventh Pay Commission recommendations is expected to be around Rs 74,000 crore.

While defence ministry estimates say additional spending impact due to OROP is expected to be around Rs 8,000 crore, finance ministry officials claim it could be as much as Rs 15,000 crore.

The 900-page report of the Seventh Pay Commission headed by Justice A K Mathur was presented to Finance Minister Arun Jaitley on November 19 with a recommendation for raising minimum pay to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000. For the Secretaries it has been fixed at Rs 2.25 lakh as against Rs 80,000 currently.

The pay commission award is from Januray 1. 2016 but it is likley to be implemented from mid-this year and employees paid arrears.

The panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The overall increase in salary, allowances and pensions is 23.55%. The increase in allowances will be higher by 63% while pensions will rise 24%.


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