7th Pay Commission: Government Employees to Get 23.55% Salary Hike in India

June 30, 20168:10 am716 views

Bringing smiles to over crores of government employees and pensioners, the Union Cabinet has finally approved the report made by secretaries’ panel on 7th Pay Commission recommendations.

The government employees will now receive salary hike of 23.55 percent, allowances and commission as approved by the 7th Pay Commission. This hike declared is inclusive of allowances. Finance Minister Arun Jaitley congratulated government employees on a historic rise in their salary.

The Indian Army will benefit the highest from this salary hike announcement, to reflect raise from Rs. 21,000 to Rs. 31,500. Also the gratuity ceiling for government employees has doubled from Rs. 10 lak to Rs. 20 lakh now.

The 7th Pay Commission recommendations will be effective from January 1, 2016. The entry-level pay has recommended to be raised from current Rs. 7,000 per month to Rs. 18,000 per month. The maximum pay has to be fixed by the Cabinet Secretary has to be Rs. 2.5 lakh from the current Rs. 90,000, Zee News reports.

Around Rs. 70000 crore has been provisioned for this once in a decade pay hike for government employees, and there has been built-in allocation for different ministries.

More disposable income in the hands of Indian middle class could mean more spending power on assets such as car and housing, thus resulting in significant boost to the economy.

“Usually the government accepts proposals for pay revision every 10 years and state governments respond with their own hikes. The pay commission’s recommendations say a fresh IAS recruit will get a basic salary of Rs 56,000 a month against Rs 23,000 currently, while a soldier in the Indian Army will earn Rs 21,700 a month from Rs 8,460 at present,” Hindustan Times reports.

See: Revised Pay-Scales for Salaries of Central Government Employees in India Awaits Finalisation

Additionally, employees will be paid dearness allowance and house rent among many other allowances. The commission has proposed a change in the salary structure by doing away with the system of pay bands and grade pay and recommended “pay matrix”. It has also called for scrapping overtime allowance and interest-free loans to buy motor vehicles.

Rs. 73,650 crore of the total payout will come from the general budget, while Rs. 28,450 crore will come from the railways, NDTV reported.

The move has led to the discontentment among lawmakers who allege disparity with government officers. To address their resentment, the government is also considering a hike in salaries and allowances of lawmakers.

The maximum pay is set at Rs 2,25,000 per month for apex scale and Rs. 2,50,000 per month for cabinet secretary and others at the same pay level (as against the current Rs 90,000 per month).

The concept of separate grade pay has been done away with and the grade pay at all levels has been subsumed into the pay matrix.

The recommendations clearly state that the matrix may be reviewed periodically without waiting for the long period of ten years.

The pay structures in vogue, by way of pay scales or pay bands, indicate the definite boundaries within which the pay of an individual could lie. It is however difficult to ascertain the exact pay of an individual at any given point of time.

Also read: India is likely to Employ 2.9 million Flexi Staff by 2018: Report

Image credit: Zee News

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