Central government employees cheer as 7th Pay Commission recommends 23.55% hike in salaries

The Seventh Central Pay Commission has suggested a 23.55% hike in the salaries and pensions of over 45 lakh government employees and 52 lakh people who have retired.

Panel headed by Justice AK Mathur submitted the recommendations to Finance Minister Arun Jaitley. A pay commission is constituted every decade to revise the salary scales of government employees.

The salaries are adjusted for inflation every year through Dearness Allowance and the pay and pension components are hauled once in a decade.
In the report, the panel has suggested an increase of 16% in pay, 63% in allowances and 24% in pensions. This adds up to Rs 1.02 lakh crore in FY16, which will have a financial impact of Rs 73,650 crore on Union Budget and Rs 28,450 crore on Railway Budget.

Experts point out that the 7th Pay Panel’s recommendations will have an effect on fiscal consolidation plans. The forecast of Indian economy’s growth is 7.5% in the current year.

The Pay Panel has recommended that minimum pay for government workers should be Rs 18,000 per month, an increase of 14.33% and maximum pay in the apex scale, drawn by secretaries, should be fixed at Rs 2.25 lakh per month and that for the cabinet secretary at Rs 2.5 lakh.

Meanwhile, the seventh pay commission also suggested a revised pension formulation for non-military personnel including the Central Armed Police Forces as well as for defence staff who retire before January 1, 2016.

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