Things You Need To Know About The 7th Pay Commission

Ones it is out the Association will appeal to the state government to set up a committee and implement within three months the 7th Pay Commission report for state employees.

Over 1 crore Government employees and pensioners have reasons to cheer as Seventh Pay Commission's recommendations will be implemented soon and their salaries and allowances hiked by around 24 per cent.

The panel had recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The Seventh Pay Commission is expected to change the remuneration of 47 lakh central government employees and 52 lakh pensioners.

He further said that while the highest salary has increased from Rs 90,000 to Rs 2,50,000, the lowest salary has been increased from Rs 7,000 to Rs 18,000 only. The Pay Commission had projected a Rs 72,800 crore impact because of pensions and salary increases and Rs 29,300 crore on account of allowances.

Implementation of the much-awaited pay hike for over 1 crore central government employees and pensioners will be a positive for the economy as it will push up consumption although its impact on inflation is likely to be moderate, economists say.

Since the 7th Pay Commission report will be effective from January 2016, the government will decide if the arrears for the six months have to be paid in one go or in instalments. However, the maximum salary of the Cabinet Secretary and its ranks is limited to Rs 2.5 lakh. "Around Rs 74,000 crore would be the impact on the Union Budget and Rs 28,000 crore on the Railway Budget". "Thus the net impact on the central government finances is estimated to be Rs 80,641 crore (0.54 per cent of GDP)", Ind-Ra said.

"Since independence seven Pay Commissions have been constituted all by Congress or Congress-led Governments". "The Seventh Central Pay Commission award is expected to be less severe on state finances than expected earlier due to a lower arrear pay out".

"The minimum pay of govt. employees will increase to Rs. 18,000 from existing of Rs. 7,000", added Jaitley.

He said, there is no justification for the strike by the unions over Pay Commission. The dates for this will be January 1 and July 1.