Good news for govt employees, cabinet likely to announce implementation of 7th Pay Commission soon

The government is likely to soon announce the implementation of 7th Pay Commission that would hike the salaries and allowances for over 1 crore government employees and pensioners by at least 23.5%.

A Committee of Secretaries headed by Cabinet Secretary P K Sinha has submitted its report on the recommendations of the 7th Pay Commission which may be accepted, a financial ministry official said. Based on the panel's report, the Finance Ministry is preparing a Cabinet note and the issue may come up for approval by the Cabinet as early as June 29. "Committee of Secretaries (CoS) has finalised its report on Pay Commission recommendations... We will soon (file) draft Cabinet note based on the report," Finance Secretary Ashok Lavasa said here today.

The government had in January set up a high-powered panel headed by Cabinet Secretary to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners. The Pay Commission had recommended 23.55% overall hike in salaries, allowances and pension involving an additional burden of Rs 1.02 lakh crore or nearly 0.7% of the GDP.

The panel recommended a 14.27% increase in basic pay, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20% hike which the government doubled while implementing it in 2008.
The 23.55% increase includes hike in allowances. The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000.

Sources said the secretaries' panel may have recommended higher pay increase, with minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 3.25 lakh. While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.
Around Rs 70,000 crore has been provisioned for it, officials said.

Lavasa said the 7th Pay Commission report will be effective from January 1.