7th Pay Commission report: Govt set to accept all recommendations; deny retro effect
The Cabinet is likely to approve
the 7th Pay Commission award in its entirety soon. Although the pay
increases recommended by the commission will take effect from January 1,
2016, the Centre may choose to disburse the increased allowances only
prospectively, official sources said.
If the revised allowances take
effect only from, say, September this year, the savings to the exchequer
would be to the tune of Rs 11,000 crore. Additionally, if the railway
ministry decided to toe the Centre’s line, the national transporter will
save around Rs 3,800 crore.
The salary revision, which will
benefit about 50 lakh government employees and 58 lakh pensioners, is
expected to boost consumption demand and help achieve higher economic
growth in FY17.
Allowances are currently roughly
half of the Centre’s salary bill; as per the pay panel’s award, the
steepest increase — 63% — was in allowances, while the overall rise in
pay, allowances and pensions recommended was 23.55%.
The Budget in February had
provided `53,500 crore towards the pay panel-induced overall rise in
pay, allowances and pension (PAP) and also to finance the
one-rank-one-pension scheme for the armed forces. The commission, in its
November 2015 report, had estimated the additional outgo in FY17 due to
its award at `73,650 crore.
“A Committee of Secretaries
(headed by the Cabinet secretary PK Sinha), has finalised its report on
Pay Commission recommendations… We will soon make a draft Cabinet note
based on the report,” finance secretary Ashok Lavasa said. Sources said
the report will be considered by the Cabinet as early as Wednesday. The
committee was set up in January.
While there is no official word
on the exact provision made in budget for higher pay, Lavasa in a recent
interview to FE said that its premature to say whether the provisions
made in the budget are adequate or not to meet the pay panel
requirements.
Source : http://www.financialexpress.com/
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