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7th Pay Commission: Pay hike sounded out

New Delhi: To raise or not to raise the pay for central government employees is an uphill task being mulled by policymakers and government.

Arun Jaitley's ministry is mulling to increase the pay of employees who get salaries from pay matrix level 1 to 5.
Arun Jaitley’s ministry is mulling to increase the pay of employees, who get salaries from pay matrix level 1 to 5.

Broadly speaking, central government employees’ unions are proponents of the hike amid demand for a fairer pay resulting from lower-level employees’ blood-and-sweat efforts. But as usual, financial experts have voiced opposition on the grounds that pay hike would derail India’s economy.

On June 29, 2016, the government approved the proposal of the 7th pay panel for replacing the 6th pay commission pay scales with a fitment factor of 2.57 times uniformly, which is minimal hike in pay.

The 7th Pay Commission recommended of minimum pay from Rs 7,000 to Rs 18,000 while the maximum pay from Rs 90,000 to Rs 2.5 lakh

The Finance Minister Arun Jaitley had said in Rajya Sabha on July 19, 2016, “The minimum pay Rs 18,000 was made on recommendations of the 7th Pay Commission. But government will consider hiking it after discussions with all stakeholders, once the proposal in this regard will be submitted to government by the proposed High Level Committee”, which employees hoping for a favourable outcome.

The minimal hike does not affect lower and middle-level employees, as such increase did not induce a significant food inflation, said a union leader.

The unions were demanding minimum pay Rs. 26,000 instead of Rs 18,000 and 3.68 fitment factor for all employees. Accordingly, they had threatened to go on an indefinite strike over pay hike on July 11, 2016.

The unions had called off their indefinite strike after they had met the Finance Minister Arun Jaitley on June 30, 2016 and he assured to hike pay and fitment formula.

However, instead of the High Level Committee, the government formed the National Anomaly Committee (NAC) in September 2016 to resolve pay anomalies.

The NAC met many times under the chairmanship of Secretary, Department of Personnel and Training (DoPT) on the issues of pay hike and fitment factor but negotiation with stakeholders didn’t reach an agreement, after issuing DoPT’s letter dated October 30, 2017, said the leader.

“The DoPT letter states that minimum Pay and fitment formula do not appear to be treated as anomaly, therefore, these do not come under the purview of NAC,” he added.

“It is the right time to increase pay for central government employees, but the DOPT can’t agree on any fitment formula for such a hike,” he also said.

The Finance Ministry, who may formulate an appropriate formula for hike in pay to suit the country’s economic situation among both government and employees, he suggested.

“As we know, the pay hike in our country also depends upon political factors and election campaigns too,” he confirmed.

The source in Finance Ministry said the ministry is concerned about the pay hike because such a move will take a toll on the exchequer.

“The Finance Ministry has agreed to increase the pay for the central government employees, but it should not be increased for all. This ministry is mulling to increase the pay of employees, who get salaries from pay matrix level 1 to 5,” the Finance Ministry source said.


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