7th Pay Commission eight important points to think

| November 30, 2015

7th Pay Commission on pay, pension: From minimum to maximum salary, top 8 points to ponder

The 7th Pay Commission on pay, pension and allowances of government servants expects a huge outgo and analysts have raised flags of their own – from red to green.

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The 7th Pay Commission on pay, pension and allowances of government servants expects a huge outgo and analysts have raised flags of their own – from red to green. Some say it is going to boost inflation to new highs as bureaucrats will hit the markets to shop-till-they-drop, others are saying it will be a booster shot for the industry, which has been hit by a slowdown. Be that as it may, we look here at the top financial implications and impact points of the 7th Pay Commission report:

1. Minimum pay, based on the Dr Wallace Aykroyd formula (nutrition), the minimum pay in government is recommended to be set at Rs 18,000 per month.

2. The total impact of the Commission‟s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in case of VI CPC.

3. The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the “Business As Usual” scenario.

4. Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs  29,300 crore and increase in pension would be Rs 33,700 crore.

5. Out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.

6. In percentage terms the overall increase in pay & allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 percent.

7. Within this, the increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent.

8.Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level. Recommended Date of implementation: 01.01.2016.

Category: News, Seventh Pay Commission

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