7th Pay Commission - New Pay Scales from August 1, 2016

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The long wait of central government employees for the 7th Pay Commission payout may end soon with the government working on the possibility of starting to credit their accounts as per the proposed new pay scales from August 1, 2016.

“Central government employees could get the revised pay-scales with their July salaries that would be credited on August 1,” sources close to officials working on the implementation of the 7th Pay Commission report told FeMoney.

However, while there are indications that arrears would also be credited along with revised pay, it is not clear whether the past dues according to the Commission’s report would be given at one go or in instalments.

The exact position is likely to be clear after the meeting of the 7th Pay Commission committee, headed by Cabinet Secretary P K Sinha, on June 11 to decide the final contours of the payout plan.

The 7th Pay Commission recommendation, which will come into effect with retrospective effect from January 1, 2016, will result in higher pay package of 47 lakh central government employees and 53 lakh pensioners.

The Commission has recommended a 23.55 per cent hike in pay and allowance. While pay will go up by 16 per cent, increase in allowance will be 63 per cent and increase in pension 24 per cent.

According to reports, the Empowered Committee of Secretaries under Cabinet Secretary Sinha has recommended a wage hike of Rs 21,000 and Rs 2.7 lakh for the lower and upper level, respectively. This works out to Rs 3,000 more at the lower end and Rs 20,000 more for the upper level than what the 7th Pay Commission prescribed.

The impact the 7th Pay Commission recommendations will be to the tune of Rs 1.02 lakh crore on the government’s exchequer, with the break-up being Rs 73,650 crore on the Union Budget and Rs 28,450 crore on the Railway Budget.

Source - The Financial Express