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7th Pay Commission


The much awaited seventh pay commission is going to enter the last phase of implementation soon.

The Union Cabinet is expected to take up the recommendations of the 7th Pay Commission on June 29.

As per reports, Prime Minister has directed Finance Ministry to implement the Pay Commission for government employees, and place the Empowered Group of Secretaries report on the central government employees' salary and allowances hike in the next Cabinet meeting on Wednesday, June 29.

It is expected that Empowered Group of Secretaries panel has raised the fitment factor to around 2.7, up from 2.57 as recommended by the 7th Pay Commission. The entry level salary is expected to rise to Rs 23,000, up from Rs 18,000 as recommended by the AK Mathur panel. Implementation of the Pay Commission report is going to cost the government Rs 1.02 lakh crore.

The Commission will revise the pay of nearly 47 lakh central government employees and 52 lakh pensioners, which will be effective from January 1, 2016.

With the threat of strike by central government employees looming large, the Cabinet is expected to take a prompt decision on the recommendations resulting in notification.

The salary hikes recommended are expected to apply from July.

The government is likely to soon announce the implementation of Seventh Pay Commission that would hike the salaries and allowances for over 1 crore government employees and pensioners by at least 23.5 per cent.

A Committee of Secretaries headed by Cabinet Secretary P.K. Sinha has submitted its report on the recommendations of the Seventh Pay Commission which may be accepted, a financial ministry official said.

Based on the panel’s report, the Finance Ministry is preparing a Cabinet note and the issue may come up for approval by the Cabinet as early as June 29.

“Committee of Secretaries (CoS) has finalised its report on Pay Commission recommendations... We will soon (file) draft Cabinet note based on the report,” Finance Secretary Ashok Lavasa said here on Monday.

The government had in January set up a high-powered panel headed by Cabinet Secretary to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.

The Pay Commission had recommended 23.55 per cent overall hike in salaries, allowances and pension involving an additional burden of Rs 1.02 lakh crore or nearly 0.7 per cent of the GDP.

The panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.

The 23.55 per cent increase includes hike in allowances.

The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000.

Sources said the secretaries’ panel may have recommended higher pay increase, with minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 3.25 lakh.

While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.

Around Rs 70,000 crore has been provisioned for it, officials said.