Published On: Thu, Oct 12th, 2017

7th Pay Commission: Pay to be hiked by fitment factor 3

New Delhi: Finance Ministry on Wednesday encouraged a proposal to raise basic pay of central government employees beyond 7th pay commission. However, a Reuters poll found development that would make further monetary policy easing unlikely for retail inflation edged up in September, driven by higher salaries of government employees as well as the impact of the GST.

Finance Minister Arun Jaitly is very much ready to issue the notification on  implementation of the 7th Pay Commission recommendations shortly.

FM Arun Jaitley had agreed to raise the minimum pay on June 30, 2016.

The Modi government wants to lift basic pay of central government employees to fitment factor 3.00 times from 2.57 times to raise the minimum pay from Rs 18, 000 to Rs 21,000.

The proposal is likely to be effectively passed by the National Anomaly Committee (NAC) that is scheduled to meet this month in the same context.

“The notion that this increase would have a negative impact on the exchequer is nonsense,” a top official of the finance ministry today told The Sen Times on condition of anonymity.

Proponents of the increase countered that government is highly profitable based on today’s petrol and diesel prices of around Rs 72 and Rs 60 per litre respectively. However, international crude oil prices may have halved since the Modi government assumed office, but it has made practically no difference to the consumer. This anomalous situation encapsulates a misguided taxation policy that has treated the oil sector as government’s cash cow, the official added.

The government last year approved for hike in pay under 7th pay commission recommendations, giving minimum basic pay from Rs 7,000 to Rs 18,000 per month while the maximum basic pay from Rs 80,000 to Rs 2.5 lakh with fitment factor 2.57, which have been paid with arrears, effective from January 1, 2016.

The central government employees unions have been demanding minimum pay Rs 26,000, higher than the Rs 18,000 approved by the cabinet on June 29, 2016 on the 7th Pay Commission’s report and asked to raising fitment factor 3.68 times from 2.57 times.

So, the government had form NAC under pressure to look into pay anomalies arising out of the implementation of the 7th Pay Commission’s recommendations.

“Finance Minister Arun Jaitley had agreed to raise the minimum pay on June 30, 2016 after discussions with all stakeholders through NAC,” a union leader said.

“I hope the government will implement the hike in minimum pay and revise the fitment formula also from the existing 2.57 to 3.00,” the union leader added.

“The government has asked the NAC to go ahead for hike in basic pay with fitment factor 3.00,” the official added.

“The Union Cabinet will take up the proposal for hike in pay with fitment factor 3.00 in January,” the official assured.

“If the 2.57 fitment formula is tinkered with, then salary and pension in general for all segments of employees will go up,” the official confirmed.


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