7th Pay Commission - No decision on Allowances

7th Pay Commission – No decision on Allowances – Existing Allowances to continue till Committee submits report – Deferring hike in allowances will have major impact in the Salary of Central Government Employees

For now, the Government employees will have to be satisfied with the bonanza at the entry level salary hike from Rs 7000 to Rs 18,000 per month while on the allowance front, it’s a wait for at least for 4 months.

As the government employees cheer the pay hike after the seventh pay commission, they will be missing out on a big chunk of their allowance hike.

The Cabinet has decided to defer the recommended allowance hike in the government employees pay package and refer the matter to a committee headed by Finance Secretary Ashok Lavasa.

Speaking to India Today, Justice (retd.) AK Mathur who headed the seventh pay commission said that this move is set to have a substantial impact.

7th pay commission - increase in allowances deferred “Allowances contribute a lot in the pay hike recommendation. If the allowance is not taken into consideration it will mean fewer amounts (for employees) because the allowance which we proposed is very substantial. We had clubbed the allowances with the basic pay which is a reasonable one”, he said.

CONGRESS SLAMS GOVT

His seventh pay commission which was formed under the UPA government had recommended average 23.5 per cent hike including the housing rent, education and transport allowances. The Congress was quick to target the government for only implementing the basic salary hike proposal.

“Government has first only increased pay to 15 per cent, not the 23 per cent. If you compare with previous government decision, we increased the salary by 40 per cent. It is cheating large section of employees. Why allowances like Medical and Transport are removed from the hike”, said Congress. spokesperson, Randeep Surjewala.

But for the government, it’s important to first balance the budgetary provisions. Although, Rs 1.02 lakh crore provision was made in the general and the railways budget for seventh pay commission, government was at risk of crossing the limit and missing the fiscal deficit target.

By deferring the allowance hike proposed by the seventh pay commission, the burden to the exchequer is reduced by a 17 per cent at Rs 84,933 crore.

“The Government must be considering the liability on them as it may have increased more than 1.02 lakh crore to exchequer if allowances were factored in. We will have to see if the matter is referred to a committee of secretary which allowances is deferred, but they will make it a lot of difference”, added Justice Mathur.

So, for now, the Government employees will have to be satisfied with the bonanza at the entry level salary hike from Rs 7000 to Rs 18,000 per month and the maximum pay cap raised from Rs 90,000 to Rs 2.5 lakh per month. On the allowance front, it’s a wait for at least for 4 months till the time finance secretary panel mulls over the proposal.

“Until the decision will be taken on the allowances issue, the present allowances will continue”, said Union Finance Minister Arun Jaitley.

Source: India Today