The Commission has recommended a consolidated monthly pay package of Rs 4.50 lakh and Rs 4 lakh for chairpersons and members respectively of the regulatory bodies. The Centre’s PAP spending could be Rs 3.5 lakh crore in FY16 and Rs 5.35 lakh crore in FY17.
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The Commission recommended abolition of all non-interest bearing advances and increased the limit for interest-bearing advances for buying home from Rs 7.5 lakh to Rs 25 lakh.
According to sources, the recommendations of 7th Pay Commission may be submitted to the central government’s finance department on November 20, 2015.
The seventh Pay Commission on Thursday recommended elaborate changes in pay and allowances of defence personnel to make military service more attractive.
“This will impact 47 lakh employees and 52 lakh pensioners”. The 7CPC award is likely to cost the central government Rs 1,02,099 crore in FY17, a 23.55% increase from FY16.
The government has pledged to shrink the fiscal deficit to 3.9% of gross domestic product in the current financial year, 3.5% in the year after and 3% in FY18. The commission has also recommended that in case of death in the line of duty, personnel of the CAPF (Centrally Armed Police Forces) like the CRPF (Central Reserve Police Force), BSF (Border Security Force) etc. should be accorded martyr status on par with personnel serving in the Defence forces like the Indian Army and Indian Air Force. This ties in with the long standing critique of the government employees that they are overworked and underpaid. The recommended increase is less than the 40% that was implemented after the last Commission in 2008.
“Next year we will work on our numbers as part of the budget”. It has recommended a number of steps to improve the functioning of NPS. “In absolute terms, the additional expenditure is expected to be in the tune of 0.65%-0.7% of GDP, slightly less than 0.77% arising from the 6th Pay Commission”, says DBS Bank Ltd in a research note. But it hastened to add that it “cannot be assumed” that there will be a reduction in the size of the government either. Economists pointed to the balance that needs to be achieved. The Commission takes its decision about the revision of remuneration after conducting discussions with various groups which represent civil employees and defence services, federations and organisations. Though this includes the business-as-usual rise (the budget projections are usually underestimates), the total PAP increase for government staff over a year would be a whopping R5 lakh crore if the FY16 budget estimate is compared with the SPC prediction for FY17.
With the salary bump, the government would hope that it will soothe the government employees, boost spending on consumer goods and curtail attrition rate to the private sector.
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The pensioner will get the higher of the two.
