7th Pay Commission award to put extra burden of Rs 1.02 lakh crore in FY 16-17

7th Pay Commission award to put extra burden of Rs 1.02 lakh crore in FY 16-17

Implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, government said today.

The implementation of recommendations of the 7th Pay Commission, however, would be after approval of the Cabinet on completion of screening of suggestions by a high-level panel of secretaries, the Rajya Sabha was informed today.

The implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore (or 0.7 per cent of GDP at current market prices) on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016.

In a written reply, Minister of State for Finance Jayant Sinha also said that the announcement of Dearness Allowance has no impact on the recommendations of the Pay Commission.

Giving details of financial implications of the recommendations, Sinha said the burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Without the Pay Commission recommendations, the outgo would have been Rs 2.44 lakh crore.

The outgo towards HRA will increase by Rs 17,200 crore to Rs 29,600 crore. The outgo on pension front will be Rs 1.76 lakh crore (increase of Rs 33,700 crore) and on other allowance will be Rs 36,400 crore (up Rs 12,100 crore).

The Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission was set up in January.

The recommendations of the Pay Commission will have bearing on the remuneration of 48 lakh central government employees and 52 lakh pensioners.

PTT

Cabinet likely to approve 7th Pay Commission award with increment

Cabinet likely to approve 7th Pay Commission award with increment

The cabinet is likely to approve the 7th pay commission award for central government employees in June for which the public exchequer will have to spend an additional amount of Rs 1.02 lakh crore.

However, there are no dearness allowance in their salary structure as the government recently announced 125 percent Dearness Allowance (DA) on which the pay panel recommended the 7th pay commission award.

Introducing a new provision of perks with the pay packet, the central government is also likely to give a increment, which is to be due in July, the month of implementation of pay commission recommendations for the central government employees, sources said.

The pay panel recommended minimum pay to Rs 18,000 per month from Rs 7,000, while the maximum pay has been recommended Rs 2.5 lakh per month from current Rs 90,000. It’s made a width pay gap discrimination between employees and higher officers from existing 1:12 to 1: 13.8.

The Empowered Committee of Secretaries is likely to propose minimum pay Rs 20,000 but central government employees unions demanded minimum pay Rs 26,000.

Under the pay scale the officers and employees will be entitled to House Rent Allowance (HRA) at the rate of 24 percent, 16 percent and 8 per cent of their new basic pays but it will be paid from the date of the Seventh pay commission award implementation. So no arrears will be paid in this segment.

The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

So the HRA segment will rise dramatically more than 100 percent of the existing House Rent Allowance (HRA).

The pay as per the pay panel report was set at Rs 2.25 lakh for secretary-level officers. Accordingly, the House Rent Allowance (HRA) for secretaries would be more than Rs 56,000.

The report of the Seventh Pay Commission was presented to Finance Minister Arun Jaitley in November with a recommendation for 14.27 per cent increase in basic pay. The overall increase in salary, allowances and pensions is 23.55%. The increase in allowances will be higher by 63% while pensions will rise 24%.

The government set up a 13-member Empowered Committee of Secretaries (CoS) headed by Cabinet Secretary P K Sinha for processing the report of the Seventh Pay Commission before cabinet nod.
An Implementation Cell has been created in the Finance Ministry which works as the Secretariat of the Empowered Committee. All central government employees unions’ submitted their written demands in respect of seventh pay commission’s anomalies in the cell to review, which are under process.

The central government has also been provisioned Rs 70,000 crore in the Union Budget 2016-17 to meet the demand for the new pay commission award that will be made effective from January 2016.

TST