20-November-2015: The Seventh Pay Commission headed by Justice AK Mathur, submitted its report to Finance Minister Arun Jaitley, suggesting 23.55% Hike in Pay and Allowances of Government Employees. The hike will be effective from 01-January-2016. The recommendations will be examined and the government will take a final decision on this. As per recommendation;
At present the Minimum salary is Rs. 7,000/- per month. After implementaton of 7th Pay Commission recommendation, the Minimum Salary would be Rs. 18,000/- per month.
The Maximum Salary recommended is Rs. 2.50 lakh per month.
The 7th Pay Commission has recommended the Rate of Annual Increment @ 3%.
The 7th Pay Commission recommended 24% Hike in Pensions.
The 7th Pay Commission proposed One Rank One Pension for civilian government employees on line of OROP for armed forces.
The 7th Pay Commission Recommendations will impact 47 lakh serving Government Employees, 52 lakh Pensioners, including Defence Personnel.
With the announcement and subsequent approval of the Prime Minister Dr. Manmohan Singh, the UPA Government has made a smart move to lure the vote banks of Central Government employees just ahead of the state election and the national election in coming March. Well, for many, who are not central government employees, this may feel like an election propaganda, but to the actual citizens, it is something that most awaited in the prevailing time of economic turbulence and inflations.
Since a long time now, Social Media platforms are stuffed with casual comments on rise of fuel prices, rise of other consumer goods and comparably left-behind salary structures and pay packages. In fact, these casual comments indicate a bitter truth of Indian economic scenario at the present times. In such an event the announcement of 7th Pay Commission is definitely a welcoming step for stabilizing social conditions and routine budgets of an average Indian household.
What is a Pay Commission:
Pay Commission is an independent commission set up by the Central Government to judge the structure of economy, compare the rationality between the average pay packages, figure out any discrepancies and suggest for amendments. These are usually formed in every 10 years in India, and are often observed to heighten the salary structures and pay packages of central government employees. Although central government employees have provision for revision of inflation-linked Dearness Allowance twice a year, the Pay Commission works for enhancement of basic pay structure and Grade pay allowances.
When the 7th Pay Commission is expected to be implemented:
With the recent announcement from the Prime Minister and subsequent approval from the Parliamentary Committee, there is a time span of 2 years allocated to the Commission for offering its recommendations. According to the Finance Minister Mr. P. Chidambaram, the Pay Commission may be implemented with effect from 1st January 2016. This is a calculated guess as the 6th Pay Commission will complete its 10th year of implementation on 2016.
What is expected outcome:
The IRTSA (Indian Railways Technical Supervisor Association) has made a comprehensive analysis of all the Pay Commission recommendations since the 1st one from 1946 till the 6th one on 2006 and presented a projected pay structure after the implementation of 7th Pay Commission recommendations during January 2016. According to this analysis and a virtual multiplier of 3, the present salary structure is expected to have a growth of almost 3 times from the present pattern with the implementation of 7th Pay Commission. The basic initial Pay for an entry into Pay Band-I, which is Rs.7000 at present, is expected to rise to Rs.21000 and that will proportionately rise for the higher grades. The cabinet Secretary Scale, which is fixed at present at Rs.90000, is expected to grow up to Rs.270000 with this recommendation.
Contra-indicators:
Although the step initiated by the UPA government is welcomed at many quarters, most people, who are not in the Central Government, are criticizing this for many factors. As per economical speculations, the 7th Pay Commission will offer an extra burden of almost Rs.50000 Crores per year on the Indian government spending at the central level only as compared to the Rs.22000 Crores per year during the implementation of the 6th Pay Commission. This is a huge figure as compared to the national indices and will further deteriorate the present economic scenario, which is struggling hard with the rise in inflation and other economic crises. Although the UPA government is manifesting an agenda to bring down the current fiscal deficit of almost 6.1% (which was 6.5% during 2009-10) to 3% by the year 2016-17, but it still stands as an imaginary figure without any base and concrete economic policy.
This is also expected to affect adversely to the state governments as well, who will be forced to revise their salary scales as per the Central Government structure. According to Professor Ram Singh from Delhi School of Economics, “This bill throws a serious challenge for the states, who will be affected seriously for these developments.”
How many people will be benefited if implemented:
In spite of various criticism and remarks from the economic bulls, if the 7th Pay Commission will be implemented as speculated, it will bring smiles to almost 50 lakh Central Government Employees and 35 lakh pensioners. This estimation has been made on the real time mode and this will positively affect almost 85 lakh beneficiaries as a whole.
Post-mortem of the announcement:
Although this is a quite welcoming step by the government for the people struggling to meet their regular expenses with a subtle lifestyle, but the time of announcement is offering a huge criticism to the ruling party as it happened with the Food Security Bill. The announcement of Constitution of 7th Pay Commission on the advent of General Elections is being looked as a seer Election Force. Even some top bureaucrat has commented that this is nothing but a strategy to make the waters muddy for the next ruling government by burdening them with additional huge expenses. In an unstable economy, this is another step towards ultimate crisis rather than a welcoming step for the employees. But, looking at the positive outcomes, this is definitely a step that is the need of the time for the government employees and desk-bearers. And, this should be compensated adequately with a stable economy so as to hold back the recession and enhance the quality of life.
Let’s Hope for the best, secluding all negatives for a stronger economy and prosperous life-style. Let’s hope to achieve the miraculous figure of 3% fiscal deficit by 2006-17. Let’s have a positive outlook on the other sectors and their salary structures, as well. This is the time to wait and watch the developments as there is another 2 years to wait before the final implementations.