Salaries of Central govt employees may increase from Jan 2016

The Seventh Pay Commission has recommended a hike of 23 per cent in salaries of central govt employees w.e.f. Jan 1, 2016. It will involve an expenditure of Rs 1.02 lakh crore on the union government. Justice AK Mathur has submitted the 7th Pay Commission report to the Finance Minister.

The pay commission is constituted by the government every 10 years to revise the pay scale of its employees. The Sixth Pay Commission was implemented w.e.f. January 1, 2006.

Highlights:

• The 7th Pay Commission report will benefit 47 lakh employees of the Central govt and 52 lakh pensioners.
• The minimum pay in the government is recommended to be set at Rs 18,000 pm.
• The maximum pay has been set at Rs 2.25 lakh per month for top scale and Rs 2.50 lakh per month for Cabinet Secretary and others at the identical level.
• The recommended date of implementation is January 1, 2016.
• The total financial impact for 2016-17 is likely to be Rs 1.02 lakh crore on the government.
• Out of the total financial impact of Rs 1.02 lakh crore, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.
• Recommendation of a new pay structure by the 7th Pay Commission
• The position of the employee, which was earlier determined by grade pay, will now be decided by the level in the pay matrix.
• The rate of annual increment is being maintained at 3 per cent.
• No grant of annual increments in case of those employees who are unable to meet the target for a regular promotion in the first 20 years of their service.
• The Military Service Pay will be allowable to the defence force personnel only.
• Short Service Commissioned Officers will be allowed to exit the Armed Forces at any point in time between 7 and 10 years of service.
• The commission has recommended a revised formulation for lateral entry and resettlement of defence force personnel.
• Abolishing of 52 allowances altogether given to the defence force personnel. Allowances relating to risk/hardship will be governed by the proposed risk/ hardship template.