New Pay Commission may not be formed in future for increasing salaries of central government employees

New Pay Commission may not be formed in future for increasing salaries of central government employees

The central government is mulling not to form any Pay Commission for increasing salaries and allowances of central government employees and and pensioners in future.

No new commission may be formed in future for increasing salaries of central government employees, a reliable source from Finance Ministry on condition of anonymity.

“The government is going to take a policy decision in this regard,” the source told our reporters.

Presenting an idea about the alternative arrangement, he said that the 7th Pay Commission recommended that the pay matrix may be reviewed periodically without waiting for the long period of ten years. It can be reviewed and revised on the basis of the Aykroyd formula which takes into consideration the changes prices of the commodities that constitute a common man’s basket, which the Labour Bureau at Shimla reviews periodically.

The Pay Commission also suggested that this should be made the basis for revision of that pay matrix periodically without waiting for another Pay Commission.

So, it will not be necessary to form a new pay Commission after every 10 years for central government employees and pensioners and whether any change is required regarding pay and allowances would be made considering inflation.

Food and Agriculture Organisation (FAO)’s first director and Nutritionist Wallace Rudel Aykroyd has formulated his recommendations on the basis of requirements of foods and clothes for a person. He took into consideration the factor related to price changes in commodities affecting the living of common man.

Government Considering an Alternative for Pay Commission?

Government Considering an Alternative for Pay Commission?

"Whether the Government is considering an alternative for increasing the salaries and allowances of Central Government employees and pensioners in future instead of forming Pay Commission?"

Pay Commission Reports - Q&A in Lok Sabha

Whether the reports of successive Pay Commissions have been increasing the burden on Government finances/ exchequer in partially accepting their recommendations for increase in wages and if so, the details thereof; ?
The financial impact of the recommendations of the Central Pay Commission, as accepted by the Government, is normally more pronounced in the initial year and gradually it tapers off as the growth in the economy picks up and fiscal space is widened. While implementing the recommendations of the last Central Pay Commission, i.e., the Seventh Central Pay Commission, the Government staggered its implementation in two financial years. While the recommendations on pay and pension were implemented with effect from 01.01.2016, the recommendations in respect of allowances have been implemented with effect from 01.07.2017 after an examination by a Committee. This has moderated the financial impact of the recommendations. Moreover, unlike the previous 6th Pay Commission, which entailed substantial impact on account of arrears, the impact in the year 2016-17 on account of element of arrears of revised pay and pension on the present occasion of the 7th Central Pay Commission pertained to only 2 months of the previous financial year of 2015-16.

Whether the last Pay Commission has suggested productivity linked pay hike to the deserving employees to eliminate below average or mediocre performance and if so, the details thereof; ?
The Seventh Central Pay Commission in Para 5.1.46 of its Report proposed withholding of annual increment in the case of those employees who are not able to meet the benchmark either for Modified Assured Career Progression (MACP) or regular promotion within the first 20 years of their service.

Whether such periodic hikes in wages resulting from Pay Commission recommendations trigger similar demands from the State Government/public utility employees, imposing burden on already strained State finances and if so, the details thereof; and?
The service conditions of employees of State Governments fall within the exclusive domain of the respective State Governments who are federally independent of the Central Government. Therefore, the concerned State Governments have to independently take a view in the matter.

Whether the Government is considering an alternative for increasing the salaries and allowances of Central Government employees and pensioners in future instead of forming Pay Commission and if so, the details thereof?
No such proposal is under consideration of the Government.

Source: Lok Sabha

8th CPC: Abolish the system of formation of Pay Commission in future?

Abolish the system of formation of Pay Commission in future?

Government is planning to abolish the system of formation of Pay Commission in future?

Central Government replied that there is no such proposal at present under consideration.

In Lok Sabha on 5th January 2018, A Hon'ble member asked some questions about the Pay Commission and DA Merger as follows…

• whether the National Anomaly Committee (NAC) under the 7th Central Pay Commission has submitted its interim report, if so, the details thereof;
• whether the Government is planning to abolish the system of formation of Pay Commission in future, if so, the details thereof and the reasons therefor;
• whether the Government is considering to adjust the salaries of its employees and pensioners Dearness Allowance (DA) that crosses the 50 per cent mark, if so, the details thereof and if not, the reasons therefor; and
• whether the Department of Expenditure planning to take the responsibility to regularly monitor salaries and allowances of central government employees and recommend the changes if needed, if so, the details thereof and the reasons therefor?

The Minister of State for Finance Shri P.Radhakrishnan replied that the National Anomaly Committee set up by the Department of Personnel & Training in August, 2016 following the decision of the Government on the recommendations of the 7th Central Pay Commission has not yet met.