The Union cabinet on Wednesday accepted the recommendations of the 7th Pay Commission, giving a substantial raise to the salaries and pensions of central government employees.
“Salaries have to be respectable in order to attract the best talent,” Jaitley said, adding that the recommendations of the 7th Pay Commission will be implemented from January 1, 2016.
The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.
Here are the highlights from Finance Minister Arun Jaitley’s press conference this evening:
* Minimum pay of Rs 18,000 has been recommended against the existing Rs 7,000 per month
* Rs 2,25,000 per month is the maximum pay for apex scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level
* Based on the minmum pay, a fitment factor of 2.57 is being proposed to be applied uniformly for all employees
* The rate of annual increment is being retained at 3 per cent
* The commission has recommended abolishing 52 allowances altogehter
* Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances
* The total financial impact in the FY 2016-17 is likely to be ₹1,02,100 crore
* Gratuity ceiling doubled from Rs 10 lakh to Rs 20 lakh and housing loan allowance hiked from Rs 7.5 lakh to Rs 25 lakh
* Two dates of increments in place of existing one – 1st Janunary and 1st July
* Ex-gratia lump sum compensation and military service pay increased
* Existing rates of monthly contribution towards Group Insurance to continue
* Grade Pay & Pay Band structure to be replaced by Pay Matrix, comprising 19 Levels
* Total annual burden of pay, pensions and arrears of 7th Pay Commission recommendations stands at Rs 1,02,100 crore