7th Pay Panel report to be approved soon: Here is how it will benefit govt employees

7th Pay Panel report to be approved soon: Here is how it will benefit govt employees

The government is likely to announce the implementation of the 7th Pay Commissionrecommendations soon.

A Committee of Secretaries headed by Cabinet Secretary P K Sinha has submitted its report on the recommendations of the 7th Pay Commission, which may be accepted, a financial ministry official said.

Based on the panel’s report, the Finance Ministry is preparing a Cabinet note and the issue may come up for approval by the Cabinet as early as June 29.

The Commission has proposed a hefty 23.55% hike in salary, allowances and pension for 4.8 million government employees and 5.5 million pensioners.

The recommendations will lead to an additional burden of Rs 1.02 lakh crore or nearly 0.7% of the GDP.

Of the total financial impact, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.

Here is how government employees will benefit:

1) Entry-level employees: The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000.

2) Hike in allowances and salaries: The basic salary hike recommended is 16%, while that of housing rent allowance, other allowances and pensions are 138.71%, 49.79% and 23.63%, respectively.

3) Military personnel: The starting salary of a sepoy (the army’s entry rank) has been raised from Rs 8,460 (plus grade pay and allowances) to Rs 21,700 a month. At the other end of the rank spectrum, a lieutenant general will now earn above Rs 2,00,000 per month.

New salaries in the lowest grades (Pay Band 1) will be 2.57 times higher than the existing base line salaries. This caters for a multiplier of 2.25 for merging Dearness Allowance (DA) into the salary.

According to the report, the sepoy’s raised salary (2.57 times his current salary) “includes a factor of 2.25 to account for DA neutralisation, assuming that the rate of DA would be 125% at the time of implementation of the new pay as on January 1, 2016”. Read more.


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