7th Pay Commission: Govt likely to offer salary hike this year

New Delhi: The cabinet is likely to give the green light to the salary increases of lower-level central government employees as promised by the Finance Minister Arun Jaitley, effective on April 1.

FM Arun Jaitley announced for hiking salaries of central government employees in Parliament on July 19, 2016

The relief measures of hiking minimum pay and fitment factor for lower-level employees assured by Jaitley are also likely to be approved in April, a senior Finance Ministry official said who on condition of anonymity.

“The employees, who get salaries from pay matrix level 1 to 5 will get a salary increase with fitment factor 3.00 times instead of 2.57 times of basic pay of 6th pay commission. Accordingly, minimum pay will be hiked up to Rs 21,000,” the official said.

The official was responding to questions on the recent PNB fraud scam how much influence it has over pay hike of of central government employees beyond the 7th Pay Commission recommendations.

“A backlash against India’s biggest bank fraud, Rs 11,400 crore of Punjab and National Bank ‘loot and scoot’ scam by billionaire diamond king Nirav Modi and his uncle Mehul Chinubhai Choksi shows the challenge facing Prime Minister Narendra Modi, while millions of central government employees are unhappy with higher pay, which was implemented from January, 2016 and they say government is dodging them now to increase pay. They complain that they can’t afford to live with the pay hike on the recommendations of the 7th Pay Commission, which rose by 14.27 percent in the basic pay,” the official said.

“The fundamental question of whether the government can manage the higher pay burden should have been considered,” the official added.

However, the official said that the government now thinking that the announcement of FM Jaitley for hiking salaries central government employees in Parliament on July 19, 2016 and the government is mulling to implement it from April ignoring the DoPT letter on October 30.

Earlier, The 7th pay panel recommended hike of 14.27 percent in the basic pay, with a fitment factor of 2.57 times of basic pay of 6th pay commission uniformly for replacing the 6th pay commission pay scales, which was got cabinet nod on June 29, 2016. While the central government employees unions demanded for hike fitment factor 3.68 and minimum pay above the current Rs 18,000 to Rs 26,000.

The government formed the National Anomaly Committee (NAC) in September 2016 to resolve pay anomalies, following the demands of central government employees unions.

In the meantime, the Department of Personnel and Training (DoPT) issued a letter on October 30, last year stating that the demand for hike in minimum Pay and fitment formula do not appear to be treated as anomaly, therefore, these do not come under the purview of NAC.