The Union Budget for 2016-17 has allocated 60-65 per cent of total financial impact of Rs 1.02 lakh crore for hike in pay, pension and allowances of government employees as envisaged by the Seventh Pay Commission, a senior finance ministry official said. The provisioning for pay hike at 60-65 per cent of the total recommended amount works out to be Rs 61,260-66,365 crore for the next financial year.
“We have provisioned for 60-65 per cent of the total burden. This is an interim arrangement and we will wait for the report of the Committee of Secretaries on the Seventh Pay Commission and decide if there is a need for further allocation,” the official said.
Though the Budget for 2016-17 does not provide explicit details regarding allocation for Pay Commission and One Rank One Pension (OROP), they have been accounted for in the allocation for different ministries, the official added.
“No one actually knows what will be the actual burden on the exchequer for the implementation of Pay commission recommendation. We have calculated internally and allocated to various ministries and departments accordingly,” the official said.
In January, the government had set up a committee headed by cabinet secretary PK Sinha to process the recommendations of the Seventh Pay Commission.
As per the recommendations of the Commission, out of the total financial burden of Rs 1,02,100 crore for 2016-17, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs 29,300 crore and increase in pension would be Rs 33,700 crore.
The official further added that the government had fully provided for OROP in the Budget. The government has allocated Rs 5,600 crore for arrears and around Rs 7,000 crore for the annual expenditure, he added.
A total of Rs 82,332 crore has been budgeted for defence pensions this time, mainly to cater for OROP and the Seventh Pay Commission. In comparison, Rs 54,500 crore were allocated for pensions in the last budget but the actual bill shot up to Rs 60,238 crore. An amount of Rs 95,852 crore has been allocated for pay and allowances of military personnel and civilians of the defence ministry in the next financial year.