7th Pay Commission – Allowances may be delayed further by six months

| July 20, 2016

New Delhi: Central government employees are likely to get increased basic pay from next month under the 7th Pay Commission recommendations, while the government might delay by six months to hike the allowances, which will give them more money in the pocket, the compensatory perks for all employees, said finance ministry officials.

The 7th Pay Commission recommended that the overall increase in salary, allowances and pensions is 23.55%. The increase in pay is 14.27%, allowances will be higher by 63% while pensions will rise 24%.

The cabinet has approved the hike of the basic pay 14.27 but decided to defer the recommended 63% allowances hike in the government employees pay package and refer the matter to a committee headed by Finance Secretary Ashok Lavasa.

Allowances contribute a lot in the pay hike recommendation. If the allowance is not taken into consideration it will mean fewer amounts because the allowance which we proposed is very substantial.

The 23.55 per cent overall hike in salaries, allowances and pension will entail an additional burden of Rs 1.02 lakh crore to the exchequer.

Arun-Jaitley-l-ptiBy deferring the allowance hike proposed by the seventh pay commission, the burden to the exchequer is reduced by a 17 per cent at Rs 84,933 crore.

The Government is considering to reduce the liability on them as it may have increased more than 1.02 lakh crore to exchequer if allowances were factored in. It will have to see how much time take the Finance Secretary committee to take decision on it, which has not been set up till date or will it make for time killing?

As no arrears for allowances will be paid, as per usual practice, the allowances would be paid from the date of implementation.

Wishing anonymity, a finance ministry official told The Sen Times, the government would see whether there would be any wastage of public money in paying increased allowances with basic pay. The primary reason is to save money because the paying allowances as it currently stands is too expensive. By delay in paying new allowances with basic pay to save money in the exchequer.

“Until the decision will be taken on the allowances issue, the present allowances will continue”, said Union Finance Minister Arun Jaitley.

On the allowance front, it’s a wait for at least for 6 months till the time finance secretary committee mulls over the proposal.

The government will take at least one month time to set up the finance secretary committee, the committee will complete its work and submit its reports within a period of 4 months and cabinet will take up this proposal at least within one month after submitting the report.


Category: News, Seventh Pay Commission

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