Seventh Pay Commission: Employees’ delight, govt’s despair
New Delhi: The Seventh Pay Commission report is awaited, the new pay scales will be applicable to Central government employees with effect from January 2016.
50 lakh central government employees and 56 lakh pensioners including dependents hope to get this gift from April next year. The revised pay scales are likely to be implemented retrospectively starting 1 January 2016.
Many commentators say that the average increase in basic fair pay for all government employees will be in the region of 40-45%.
This is a very rough average because for senior level officers, like the Cabinet Secretary or officials at the secretary level, the payback could increase by more than 50%.
As the Pay Commission numbers come through there could be a 30-40 per cent increase for each central government employee.
An increase of salary and allowances would boost middle class central government employees to spend more time with their families for marketing.
The economy would get a major boost from a pickup in consumption, resulting from an increase in salaries but the flip side to the hike will be a spike in inflation.
The reports of Seventh Pay Commission will be implicated from April next year as Finance Minister Arun Jaitley said in the Parliament on February 27, “The Seventh Pay Commission impact may have to be absorbed in 2016-17.”
Finance Minister Arun Jaitley said above statement in his pre-budget speech. His statement indicates that the government may implement Seventh Pay Commission report from April 2016.
The strongest criticism of Pay Commission awards is that they play havoc with government finances. The pervious pay commissions’ rollout has been negative for fiscal balances.
The recommendations of the second pay commission were accompanied with a financial impact of about Rs 39 crore. The financial burden of the implementation of the third, fourth, fifth pay and sixth pay commission recommendations has been estimated at around Rs 144 crore, Rs 1,282 crore, Rs 17,000 crore and Rs 20,000 crore respectively.
Initial estimates suggest the seventh pay commission could add Rs 1,00,619 crore to the central government’s wage bill.
The central government pay and allowances amount to 1 per cent of GDP today. State wages amount to another 4 per cent, making for a total of 5 per cent of GDP.
The medium-term expenditure framework recently presented to Parliament by Finance Minister Jaitley, which looks at an increase in pay of 16 per cent for 2016-17 consequent to the Seventh Pay Commission award. That would amount to an increase of 0.8 per cent of GDP. This is a one-off impact.
One Rank One Pension is also a rider to enforcement of the seventh pay commission’s recommendation. The government is committed to OROP for the armed forces. This would impose an as yet undefined burden on Central government finances.
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COMMENTS
30 to 50% hike in pay as per article is for basic pay. But no one mention that it will be with 0% DA. If we already add 113% of DA to existing basic pay then there will be hardly any increase in pay scale with 7th pay commission. It is just the play with numbers and nothing more. Infact it is like befooling government employees.
It is building castles in the air. after receiving the report the govt may change it a lot before being implemented and further it may take more than 10 years before the benefits reach a certain section, as of now in spite of SC dismissing SLP in the case of pro-rata pension, govt has not issued orders-PPOs- re-fixing pension payment of arrears thereto,to pre 2006 retirees by which time lot many retirees might be dead and many of the nominees for FPs not being aware,as the AC officers will not suo-moto revise the pension dead with out applications from the FP nominees and if applied they would be asked to submit copies of the documents issued by Ac officer themselves which a nominee of FP may not have This happens especially in the case of illiterate nominee who resides in rural areas. Most Ac officers are in the habit of harassing retirees/ nominees on some reason or the other ,even those who are literates and when so God only should help ill- literate nominee..This is the actual ground reality.
Enforcement of OROP is a burden for the civilians but no one talks of the burden caused by NFU.If you do not like the defence services get rid of them and make do with the police forces.You will save a lot of money and the civil servants will be happy as they will be able to boss around the police which they are unable to do with the Army.