7th Pay Commission report bill: Centre does not budget for 25% of amount

7th Pay Commission report bill: The Narendra Modi government has budgeted to meet nearly three-fourths of the estimated cost of the 7th Pay Commission report in 2016-17 with a provision of some Rs 53,500 crore, as it deferred the payment of extra allowances of about Rs 22,000 crore. 

7th Pay Commission report bill: The budgetary outlay for salaries and pensions rose by Rs 59,000 crore or 21% to Rs 3.36 lakh crore in FY17, while the pay panel had pegged the annual hike in the outlay for pay, pension and allowances from the business-as-usual scenario at Rs 73,650 crore. 

7th Pay Commission report bill: While the outgo on the one rank, one
pension (OROP) scheme is subsumed in the above budget outlay for FY17,
the commission had estimated the overall increase in pay, allowance and
pensions (PAP) over the usual scenario at 23.6%. Despite no provision
for allowances, the extra PAP outlay made by finance minister Arun
Jaitley for FY17 is tending closer to the additional expenditure
estimated by the commission. 

7th Pay Commission report bill: That’s because the Budget provided for around Rs 6,000 crore to meet some non-pay commission increments to the staff and certain non-salary revenue expenditure on the armed forces, sources said. For reasons of confidentiality, the defence salary bill is not explicitly stated by the government. 

7th Pay Commission report bill: The Budget addresses a 16% overall hike in the salary and pension of central government staff. However, the increase in pension outlay is a little more than what the commission proposed thanks to OROP for the armed forces. Separately, the cost of OROP was estimated at about Rs 10,000 crore for FY17.

7th Pay Commission report bill: Apart from the estimate for FY17, the Centre will also have to foot the arrears bill for the first three months (January-March) of the pay panel’s award period sooner or later.