Published On: Tue, Jan 12th, 2016

Seventh Pay Commission to see pay hikes by 30%

New Delhi: The Seventh Pay Commission report has been submitted to Finance Minister Arun Jaitley on November 19. The expected outgo to the exchequer is around Rs Rs 1,02,000 crore.

Finance Minister Arun Jaitley

Finance Minister Arun Jaitley

The Seventh Pay Commission was set up by the UPA government in February 2014, The Commission headed by Justice A K Mathur submitted its 900-page final report, recommending 23.55 per cent hike in salaries and allowances of Central government employees and pensioners.

The panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The previous Sixth Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008

Sources said that the government will double it this time also. Hence the average increase in basic fair pay for all government employees will be in the region of 25-30%.

This is a very rough average because for junior level officials, like the Group C or Group B levels, the payback could increase by more than 30%.

But interestingly when we spoke to government employees they were not really happy, essentially perhaps because effectively if you take the DA out, it is not really a hefty bonanza as many thought it would be.

Also, existing the price rise and inflation issues, most people are saying it is really not that sufficient.

Some amendments will be made in Seventh Pay Commission report in the Finance Ministry and then it will go to the Cabinet through group of secretaries headed by cabinet Secretary for approval. If that happens, it could process by about 1-2 more months from now to next budget.

A central government employee will earn up to 40% more after the government acceptance of the Seventh Pay commission’s modification, which will be implement after budget.

This pay hike would affect the lives of over 48 lakh central government employees and 52 lakh pensioners and could trigger off similar pay hike across state governments as well.

An official of the Finance Ministry said pay will be hike to improve productivity.

The Seventh pay commission recommended fixing the highest basic salary at Rs 250,000 and the lowest at Rs 18,000and its increased the pay gap between the minimum and maximum from existing 1:12 to 1: 13.8

So, when minimum pay will be increased, the pay gap will decrease.


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