23.55% salary hike likely for central govt employees
Economic Times reported 23.55% Salary hike in the 7th Pay Commission
The much-anticipated Seventh Pay Commission bonanza for the government employees is likely soon with the Union Cabinet set to consider the panel’s recommendations on Wednesday.
The committee of secretaries tasked with reviewing the recommendations has given its report that would be considered by the government before deciding on the final award.
The Seventh Pay Commission has announced 23.55% increase in pay and allowances of serving central government employees and 24% increase in pension of retired officers.
A government official confirmed that the proposal is on the cabinet agenda for Wednesday.
The total outgo if this award is implemented from January 1, 2016, is pegged at Rs 1.02 lakh crore, providing a bid demand boost to the economy.
However, in view of fiscal constraints, the government is likely to go for a lower increase and also delay the implementation of the increase in allowances.
In the budget for FY17, the government has budgeted 32% increase in salary of its employees but only a meagre 1.9% rise in allowances.
Finance ministry officials have said that the budget has adequate provision for pay commission and the fiscal deficit target of 3.5% of GDP will not be under stress from implementation of the award.
In a report after the budget, Moody’s had said “Pay Commission recommendations of a 24% hike in public sector salary, allowances and pensions, is not fully accounted for in the budget” and will be a source of spending pressure.
The government can delay the implementation of increase in allowances to a later date but the salary increases will have to be given from January 1, 2016, which means employees will get arrears for these month, a potential boost to economy.
Car and property sales tend to rise after pay commission awards.
Source : http://economictimes.indiatimes.com