7th Pay Commission: Higher allowances with its arrears to be paid at one go
New Delhi: Higher allowances and its pending arrears for 4.8 million central government employees 5.2 million pensioners in lieu of the pay and pension components of the 7th Pay Commission would be paid at one go, said sources in Finance Ministry familiar with the matter on Thursday.
“The arrears as accruing on account of higher allowances with effect from 01.08.2016 shall be paid in cash in one instalment along with the payment of salary with higher allowances for the month of October or November 2016,” the sources said.
In June, the Cabinet had approved recommendations of the 7th Pay Commission on pay and pensions for the central government employees and pensioners.
On an average, the hike in basic pay and pension has been made 2.5 times of the 6th Pay Commission recommendations.
However, the 125 percent dearness allowance with effect from 01.01.2016 was merged with the basic pay.
The Cabinet, however, deferred a revision in allowances. A committee headed by Finance Secretary Ashok Lavasa has been set up to look into the recommendations in this regard because there was resentment among employees over suggestions to scrap some allowances.
Till a final decision on allowances is taken based on the recommendations of committee on allowances, the 6th Pay Commission recommendation’s allowances are going to continue.
The pay panel had recommended abolishing 52 allowances and subsuming another 37 out of 196 allowances.
Accordingly, the government has paid its employees arrears of basic pay arising from implementation of the 7th Pay Commission recommendations in one go in August salaries without higher allowances. The basic pay hike has been made effective from January 1, 2016.
“The committee on allowances is ready to submit its report even two months in advance as the committee was asked to submit its report within four months,” the sources added.
“The committee on allowances reached a consensus on the higher allowances to ditto the recommendations made by 7th pay Commission with slight changes but it’s proposed to implement the higher allowances with retrospective effect from August 2016,” the sources told us.
“However, as per usual practice, no arrears for allowances is paid with retrospective effect like basic pay and its are effected from the date of the implementation of new pay Commission but this time higher allowances are not enforced on the date of the implementation of recommendation of the 7th pay commission on August,” the sources revealed.
“Hence the committee on allowances proposed higher allowances from August 2016 and the Finance Minister Arun Jaitley is likely to accept it,” they confirmed it.
However, the central government employees unions demanded for implementation of the allowances with retrospective effect from January 2016.