The changes are likely to be implemented from 1 January 2016, and will affect 47 lakh central government employees and 52 lakh pensioners while bearing financial implication of Rs 1.02 Lakhs to the exchequer.
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While one member of the Commission recommended that status quo be maintained, another was of the view that the financial edge accorded to the IAS and IFS be removed.
The Commission, headed by Justice Ashok Kumar Mathur, has also recommended that a database be prepared, which can enable the government to tap high-level retirees with deep domain knowledge for contractual appointments. The recommendations are to come into force on January 1, 2016.
In its report submitted to the Union Finance Minister Arun Jaitley on November 19, the Seventh Central Pay Commission has recommended an overall increase of 23.55 per cent in pay, allowances, and pension for government employees.
Based on the Aykroyd formula, minimum basic pay of the central government staff is set to be Rs.1800, with the maximum pay for topmost officers, for example the Cabinet secretary, would be Rs. 2.
At a time when the government is pursuing the path of fiscal consolidation, the pay commission recommendations will pose a serious challenge in terms of not deviating from the fiscal deficit targets as announced in the FY16 Budget, India Ratings said.
G. Deviprasad, TS Employees JAC leader have expressed his ire over NDA government’s reluctant attitude limiting the hike only to 25 percent after 10 years, wheras the state government has hiked to 43 percent after 5 years.
He said the enhancement of pay by 14.29 per cent is very depressing for the employees as in past after submission of fifth and sixth Pay Commissions report. “Next year we will work on our numbers as part of the budget”. They said many employees in big cities will prefer to buy a house and pay EMIs rather than live in a government accommodation due to the proposed increase in HRA. It has also restricted annual increment to 3%. At the bottom of the matrix, it has been raised from Rs 30 per month to Rs 1,500 and the cover hiked from Rs 30,000 to Rs 15 lakh. It will directly impact 50 lakh central government employees and 54 lakh pensioners.
The pay rise would increase the central government’s wage bill by around 0.5% of GDP.
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“The CPC [Sixth Central Pay Commission] found that compensation to Group C and D employees in government was higher than that in the private sector; for Group B it was similar and only for Group A was it lower”, wrote analyst Sonalde Desai in The Hindu last month, making her point through the findings of the previous pay commission.
