7th Pay Commission – Minimum Pay Hike expected in the beginning of new year

| November 3, 2017

New Delhi: With the new year comes new laws across the country, and in one of the biggest changes, the government will increase minimum pay of central government employees. The government is likely to take the approach, with the minimum pay rising to Rs 21,000 from Rs 18,000 with fitment factor 3.00 times from the existing 2.57.

“The price of food has gone up. Rent has gone up. Everything has gone up. … This will make a difference for so many employees,” a leader of employees unions said. Central government employees unions leaders argue the increases will help low-pay employees now barely making ends meet and boost the economy by giving some consumers more money to spend. But many economic experts opposed the pay hikes, saying they would lead to higher prices and greater automation.

The increases is likely to come in the wake of promise was made by Finance Minister Arun Jaitley to raise minimum pay of the central government employees in a meeting with the central government employees’ unions leaders on June 30, 2016, day after the cabinet approval of the 7th Pay Commission’s recommendations.

Consequently, Jaitley formed National Anomaly Committee (NAC) in September, 2016 to look into the pay irregularities arising out of the 7th Pay Commission’s recommendations. “The NAC is likely to go ahead for hike in minimum pay Rs 21,000 from Rs 18,000 from the existing 2.57 to fitment factor 3.00,” the Finance Ministry sources told The Sen Times.

However, economic experts says note ban and GST have badly hit the country’s GDP. These two moves are affecting the nation’s economy but Jaitley says note ban and GST will fetch more revenues to exchequer. So, unions leaders say a higher minimum pay helps combat poverty, but economic experts worry about the potential impact on the nation’s exchequer.

The recommendations of NAC of minimum pay hike would be finalised soon and it it will be placed before the Cabinet by Finance Minister Arun Jaitley in January, the Finance Ministry sources said. If fitment formula is tinkered with 3.00, the salary and pension in general for all segments of employees will go up.

Earlier, the 7th Pay Commission, led by Justice A K Mathur, proposed minimum pay from Rs 7,000 to Rs 18,000 per month with fitment factor 2.57, which has been approved by the government on June 29, 2016.


Category: News, Seventh Pay Commission

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