The 7th Pay Commission headed by Justice A K Mathur, cheering the central government employees and pensioners has recommended a 23.55 percent hike in salary, allowances and pension involving an additional burden of Rs 1.02 lakh crore for the government, of which increase in salary would be Rs 39,100 crore, allowances Rs 29,300 crore and pension Rs 33,700 crore.The new pay scale will come into effect from January 1, 2016.
The pay panel, in its report submitted to the finance ministry has suggested an increase of 16% in basic salary, 63% in allowances and 24% in pension. The increase in basic pay is still the lowest in 70 years, as the previous 6th Pay Commission had recommended a 20 percent hike which the government doubled while implementing it in 2008. In its other recommendations, the commission has set the minimum salary at Rs18,000 per month and pegged the maximum pay at Rs 2.25 lakh per month for apex scale and Rs 2.5 lakh per month for cabinet secretary. It has maintained the rate of annual increment at 3% and doubled the gratuity to Rs 20 lakh from Rs 10 lakh.
The commission also favoured introduction of a health insurance insurance scheme for staff and pensioners and doubling the gratuity ceiling to Rs 20 lakh. The panel has suggested abolition of the pay band and the grade pay, and recommended a fitment factor of 2.57 which will be applied uniformly to all employees. The recommendations that will benefit 47 lakh central government employees and 52 lakh pensioners, will impact the Central Budget by Rs 73,650 crore and the Railway Budget by Rs 28,450 crore.
In a significant development, the commission without calling it one-rank-one-pension (OROP), recommended a revised pension formulation for the central government employees, including para-military personnel as well as for defence staff who have retired before January 1, 2016.
To hasten the implementation of the recommendation, the government has decided to set up an implementation secretariat that would be headed by the expenditure secretary. Finance Minister Arun Jaitley said that an Implementation Secretariat, under Expenditure Secretary, will look into the recommendation of the Seventh Pay Commission. He further said that there will be a separate Empowered Committee which is normally headed by the Cabinet Secretary where different departments of the government which are concerned with the recommendations their heads are members and therefore if any representations come from any segment, they take a view.
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