Published On: Mon, Feb 5th, 2018

7th Pay Commission: Govt to accept salary hike

New Delhi: Finance Minister Arun Jaitley had assured to raise the salaries of central government employees, accordingly, the government is likely to accept it, said a Finance Ministry official on condition of anonymity.

FM Arun Jaitley was committed to raise salaries of lower-level employees beyond the 7th Pay Commission recommendations.

Salary is to be increased of the employees who are getting salaries from pay matrix level 1 to 5 and the proposal of pay hike will be sent to Cabinet in the beginning of April for approval.

The official said the government will consider the state of the economy before issuing the inflation-targeted pay hike in terms of which employees’ salaries will fix with fitment formula 3.00 times of basic pay of 6th pay commission to almost better than fitment formula 2.57 times of basic pay of 6th pay commission, which was given nod by the Cabinet on June 29, 2016.

However, the Department of Personnel and Training (DoPT) declined comment on it, while the Finance Ministry officials did not respond to requests seeking comment on pay hike.

The official said the Finance Ministry made some inputs, including fitment formula and which employees to be covered under new pay hike for rising salaries.

Jaitley’s budget 2018 is rising pressure in the salaried class, who as he acknowledged, paid almost three times the income tax as compared to the segment of business and professional class of individuals, who are almost the same in number.

While on one hand he has granted a respectable relief of Rs 40,000 by way of standard deduction, the simultaneous withdrawal of the exemption on account of transport allowance of Rs 19,200 and reimbursement of medical expenses of Rs 15,000, totaling Rs 34,200 has virtually left the salaried class with an effective gain of exemption of only Rs 5,800. Considering the increase in the tax burden of 1% health and education cess, quite ironically, the maximum tax relief ranges only upto Rs 1,070, with even a negative impact in higher slabs of income.

Accordingly, the central government employees will suffer through the budget in financial year 2018-19.

Jaitley was committed to raise salaries of lower-level employees beyond the 7th Pay Commission recommendations, so government is under compulsion to hike salaries in 2018-19, the official said.

Jaitley promised in July, 2016 in Rajya Sabha to hike pay of the central government employees beyond the suggestion of the 7th Pay Commission.

So, the government formed the National Anomaly Committee (NAC) in September 2016 to resolve pay anomalies arising out of the implementation of the 7th Pay Commission’s recommendations.

The official said DoPT letter on October 30, last year, which stating that the demand for increase in minimum Pay and fitment formula do not appear to be treated as anomaly and also states pay hike do not come under the purview of NAC, which makes a bitter dispute over pay hike.

“The government remains committed to the promise of FM Jaitley to increase the salary of lower-level employees and to drop the DoPT letter,” the official added.


About the Author