As many as 47 lakh Central government employees appear set for healthier pay packets if the Centre accepts the Seventh Pay Commission’s recommendation of a 23.55 per cent hike in pay and allowances. The report, submitted to Finance Minister Arun Jaitley today by panel head Justice AK Mathur, will benefit 52 lakh pensioners. It will cost the exchequer ₹1,02,000 crore, or 0.65 per cent of GDP.

Jaitley told newspersons that an implementation secretariat, headed by the Expenditure Secretary has been set up. The government, he said, took five-and-a-half months to announce the implementation of the Sixth Pay Commission report, but will take a decision on the latest recommendations without any delay. The recommended date of implementation is January 1, 2016.

The minimum recommended pay is ₹18,000 a month. Justice Mathur said the maximum pay will be ₹2,25,000/month at the apex scale and ₹2,50,000/month for Cabinet Secretary-level posts. “Out of the total financial impact, the increase in pay would be ₹39,100 crore, that in allowances would be ₹ 29,300 crore and the increase in pension would be ₹33,700 crore. While ₹73,650 crore … will be borne by the General Budget, ₹ 28,450 crore will be accounted in the Railway Budget.

“In percentage terms, the overall increase in pay and allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 per cent. Within this, the increase in pay will be 16 per cent, increase in allowances will be 63 per cent, and increase in pension would be 24 per cent,” a release from the Pay Commission said.

The rate of annual increment is being retained at 3 per cent. The Commission has recommended abolishing 52 allowances. “Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix,” Mathur said. House rent allowance will be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new Basic Pay for Class X, Y and Z cities respectively.

The panel also favoured introduction of a Health Insurance Scheme for serving staff and pensioners. It also recommended a One Rank, One Pension formulation for civilian employees, including paramilitary personnel, as for Defence personnel.

The gratuity ceiling has been enhanced from ₹10 lakh to ₹ 20 lakh. The Commission said it had received many grievances relating to the New Pension Scheme.

Employees’ unions, however, were not satisfied. “This report is disappointing. The fitment benefit is very less. There is a huge gap between minimum and maximum wages. Anomalies were not addressed,” said Virjesh Upadhyay, general secretary of Bharatiya Mazdoor Sangh, affiliated to the BJP.

click here for full text of Seventh Central Pay Panel Report (pdf)

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