It may be one of the lowest pay hikes for the Central government staff and pensioners in the last few decades, but the overall 23.55% increment in their salaries, allowances and pensions resulting from the clearance of the Seventh Pay Commission recommendations by the Union Cabinet on Wednesday would cost the government a whopping Rs 1.02 lakh crore./KHANNA & ASSOCIATES
- Under the revised pay scale, the starting salary for a junior government official has been more than doubled to Rs18,000 per month from the current Rs 7,000 a month. For the Class I officers, it has been raised to Rs 56,100 per month.
- The commission, which reviews the salaries of government staff every 10 years, has capped the government remunerations at Rs2.5 lakh per month, which is also over two times of today’s ceiling of Rs90,000 per month.
- The increase in both salaries and pensions is 2.57 times more over the Sixth Pay Commission. The Cabinet also improved recommended salaries in defence to give a hike of 2.67 times as against 2.57 times to the civilians to ensure parity with the para-military forces. Those in the Armed Forces get the highest as their salary hike is from Rs 21,000 to Rs 31,500.
- The commission’s recommendations would be implemented retrospectively from January 1. Among its other suggestions, which will affect 47 lakh government employees and 52 lakh pensioners, are retention of the current 3% increment rate, application of fitment factor of 2.57 for revision of pay and pension across all levels of pay matrices and doing away with 52 allowances and merging 36 of them./KHANNA & ASSOCIATES
- The recommendation of the commission to raise the ceiling of House Building Advance (HBA) to Rs25 lakh from Rs 7.50 lakh has also been given a nod by the Cabinet. However, all interest-free loans have been abolished except for those taken for medical treatment, travel allowance (TA) on tour or transfer, TA for family of deceased employees and leave travel and conveyance (LTC).
- The pay commission’s recommendation to reduce as many as 196 kinds of allowances has been kept in abeyance. The Cabinet decided to constitute a committee headed by the finance secretary for further rationalisation of allowances and asked for its report within four months. Until then, the current allowances will continue.
- At a press conference after the Cabinet decision was announced, Jaitley said that the government had already provisioned for the incremental expenditure on account of it. “I have already provided for it (pay hike, pension and allowance costs) in this year’s budget estimate. Therefore, this amount doesn’t come to us as a surprise,” he said.
According to him, the consumption demand generated from the flush of money in the economy was “one of the important need of the economy” at a time when demand in global markets was sluggish.
We countrymen can only hope that whatever may be the policies of government, they must not burn holes in our little pockets.
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