The Cabinet has approved the setting up of Empowered Committee of Secretaries to process the...
recommendations of 7th Pay Commission in an overall perspective, Parliamentary affairs Minister M Venkaiah Naidu told reporters.
The implementation of the new pay scales is estimated to put an additional burden of Rs 1.02 lakh crore on the exchequer in 2016-17. They will take effect from January 1, 2016.
The Empowered Committee of Secretaries will function as a Screening Committee to process the recommendations with regard to all relevant factors of the Commission in an expeditious detailed and holistic fashion, an official statement said.
Finance Minister Arun Jaitley had said earlier that he was not worried about fiscal deficit and government would be able to meet its target despite additional outgo on account of higher pay.
The minister had admitted that the impact of implementing the recommendations, which will result in an additional annual burden of Rs 1.02 lakh crore on exchequer, would last for two to three years.
The seventh central pay commission on November 19 recommended a 23.55 per cent hike in the cumulative earnings of serving and retired central government employees. The figure of 23.55 per cent covers the increases in pay, allowances and pension.
However, the recommended raise in basic pay is only 14.27 per cent – the lowest in 70 years. The basic pay determines various allowances. The previous commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.
The gratuity ceiling will be enhanced to Rs 20 lakh from Rs 10 lakh. It will be raised by 25 per cent whenever dearness allowance goes up by 50 per cent.
The recommendations of the pay commission will come into effect from January 1, 2016.
The pay commission, headed by Justice A.K. Mathur, submitted its 900-page report to Union finance minister Arun Jaitley at his residence. A secretariat headed by the expenditure secretary will study the report before the government takes the final decision. Normally, the government doesn’t reject the commission’s recommendations.