With the salary hike of Central government employees set to be implemented in line with the recommendations of the 7th Pay Commission, the government has decided to pay arrears in one go along with the August salaries.
Earlier this week, the government had notified a 2.57-time hike in basic salary for nearly one crore of its staffers and pensioners. The pay hike, which will be effective January 1, 2016, will cost the exchequer an additional Rs 1.02 lakh crore annually.
Detailing the instructions for implementation of Seventh Pay Commission’s recommendations, the finance ministry said that the revised pay structure will include Dearness Allowance of 125 per cent provided in the pre-revised pay structure. The rate of the first installment of Dearness Allowance under revised pay will be announced later.
“The arrears as accruing on account of revised pay consequent upon fixation of pay under CCS (RP) Rules, 2016 with effect from January 1, 2016, shall be paid in cash in one installment along with the payment of salary for the month of August, 2016, after making necessary adjustment on account of GPF and NPS, as applicable, in view of the revised pay,” a finance ministry statement said.
The instruction said that income tax would be deducted before payment of arrears. For ensuring smooth disbursal of arrears, the ministry has instructed payment of arrear claims without pre-check of the fixation of pay in the revised scales, except for those who have retired, resigned or dismissed after the date of implementation of the pay panel recommendations.