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7th Pay Commission arrears surges September deposit: SBI Research

Mumbai: Describing the Rs 2.87 trillion surge in bank deposits ahead of demonetisation as a “curious case”, SBI’s economic research department today attributed it to 7th Pay Commission arrears for central government employees, income disclosure scheme and a seasonal surge.

SBI Chairperson Arundhati BhattacharyaPhoto : Reuters
SBI Chairperson Arundhati Bhattacharya

It said on average, deposits have grown by Rs 1 trillion in September over the last three years but a surge of Rs 2.87 trillion in this September, ahead of the move to discontinue the Rs 500 and Rs 1,000 banknotes, made it a “curious case”.

The State Bank of India wing attributed Rs 45,000 crore to award of arrears as per the 7th Pay Commission to central government employees, Rs 1.56 trillion to “a seasonal increase” given that people save for festivities and weddings which come later and the residual increase of Rs 85,518 crore due to the IDS scheme.

Finance Minister Arun Jaitley recently said there was a spike in bank deposits only in September during this year, largely due to the 7th Pay Commission arrears released in August.

The 4.8 million central government employees and 5.2 million pensioners got theirs arrears of basic pay and pension arising from implementation of the 7th Pay Commission recommendations in one go in August salaries and pension respectively. The hike in basic pay and pension has been made effective from January 1, 2016.

Out of the Rs 1.02 lakh crore gross impact of the 7th Pay Commission on the exchequer, the Budget made a provision to the extent of Rs 93,325 crore.

TST

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