7th Pay Panel Recommendations and their Impact

7th Pay Panel Recommendations and their impact

As many as 47 lakh government employees and 52 lakh pensioners,including defence personnel, will benefit from the big bonanza of a 23.55 percent hike in pay and allowances and a 24 per cent increase in pension proposed by the Seventh Pay Commission, which also suggested a one-rank one-pension for civilians on the lines of OROP for defence personnel.

A minimum pay of Rs 18,000 per month and a maximum of Rs 2.5 lakh per month has been recommended by the Commission, headed by Justice A K Mathur,that presented its 900-page report to Finance Minister Arun Jaitley. The recommendations are to be implemented from January 1, 2016.

The financial impact of the recommendations will be Rs 1.02 lakh crore - Rs 73,650 crore on Central Budget and Rs 28,450 crore on Railway budget. The award of the pay panel will also benefit staff of autonomous bodies, universities and public sector units, Jaitley said after receiving the report.


 
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Economists expect the wage hikes to boost consumption driven recovery in the domestic economy. Sales of affordable homes and consumer durables such as cars, two-wheelers and other electronic items are likely to pick up, analysts say. On the flip side, salary hikes are also expected to stoke inflation and fiscal pressures, economists say.

Would the Government of India accept and implement the recommendations as such and when is the moot question which will keep agitating the minds of concerned people.
 
The overall increase in pay and allowances and pension will be 23.55 per cent.

"Within this the increase in pay will be 16 per cent, increase in allowances will be 63 per cent and increase in pension would be 24 per cent," the Finance Ministry said.

The Seventh Pay Commission has batted for granting martyr status to personnel of central paramilitary forces, on the lines of armed forces. The Commission is of the view that in case of death in the line of duty, the force personnel of should be accorded martyr status, at par with the defence forces personnel - the recommendations submitted by the Commission said. Associations of retired paramilitary forces and those serving have time and again said that they should be accorded such a status.
 
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The recommendation of the Pay Commission on one rank one pension for all employees. it seems will further complicate the implementation of the issue being raised by ex-defence personnel who have been agitating for a considerable time !

Let us see, how the government of India reacts to this recommendation.
 
The financial impact of the Commission Report on the exchequer of the States/UTs will be enormous. The percolating impact would definitely lead the states to revise their Tax structure to meet the demand and supply of funds.

Raising of Taxes on already heavily burdened Tax payers will also be an important point to be tackled by the Government of India and the State Governments.
 
Sahi hai yaar. Private mei ab kuch nahi rakha. govt ki job lo aur thath karo. kaam kuch jayda hota nahi, aur mauj hi mauj. 8th pay commission pe to sabki salaries lakhs ke upar hogi. 1.5 lakh to start hogi issi tarah chalta raha to. sahi hai bhailogo. sarkari naukri pakado aur mauj karo.
 
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