There could be a good news for 50 lakh central government employees under the seventh pay commission.
There could be a good news for 50 lakh central government employees under the seventh pay commission. The economic data released by EPFO recently might be the deciding factor in providing benefits to the employees who have been waiting for a hike in their basic salary.
The EPFO data stated that the country's economy is growing at a rapid pace and which has led to an increase in revnues. The EPFO data on jobs has said that there has been a major employment boost.
A new data series on payrolls released by the Employees Provident Fund (EPF) showed that there was a good increase in jobs every month in the last six months, which would now help in filling the missing link for policy-making.
With this positive development, the government could consider raising the minimum basic salary to Rs 26,000, beyond the recommendation of the seventh pay commission.
Earlier, putting a dent in expectations, a research paper by the Reserve Bank of India has found that the revised House Rent Allownce (HRA) under the seventh pay commission has impacted the CPI inflation by nearly 35 basis points at its peak. The research was conducted by the monetary policy department of the central bank. The latest study might shattered all hopes of hike in minimum basic salary under 7CPC of around 50 lakh central government employees.
"Ex-post analysis of CPI shows that the 7th CPC's HRA increase pushed up headline inflation prints gradually from July 2017, with a peak impact of about 35 bps," the research paper titled 'Impact of Increase in House Rent Allowance on CPI Inflation' said.
The increase in HRA under the 7th pay commission was put into effect from July 2017. As per the recommendations of the pay panel, the basic pay of central government employees was increased by a factor of 2.57. This led to HRA being revised by 105.6 per cent that is more than double the pre-CPC level.
The paper studied the impact of increase in house rent allowance (HRA), following recommendations of the Seventh Central Pay Commission (CPC), on headline inflation.
"It is seen, that the HRA increase pushed up measured housing inflation significantly, with a peak impact of about 35 basis points. The impact is seen across most States and Union Territories. The paper shows that, so far, the actual impact of the HRA increase on headline consumer price index has turned out to be similar to the ex-ante assessment provided by the Reserve Bank in the Fifth Bi-monthly Monetary Policy Statement, December 2017", RBI's research paper said.
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 "7th pay commission: EPFO data may bring good news for 50 lakh govt employees")
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