UPDATES – 7th PAY COMMISSION All Over in One View

# MoF to work out a customised group insurance scheme with low premium and high risk cover.

# Ex-gratia lump sum compensation for civil and defence forces personnel from 10-20 lakh to 25-45 lakh.

# House Building Advance (HBA) increased from Rs 7.5 lakh to Rs 25 lakh.

# Gratuity increased from Rs 10 lakh to Rs 20 lakh.

# Rate of increment recommended and accepted at 3% per year.

# Separate pay matrices for civil, Defence and MNS.

# The cost of implementing the recommendations of the 7th pay commission will cost Rs 1,02,100 crore to the exchequer: Jaitley.

# The commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances: Jaitley.

# Minimum pay of Rs 18,000 per month recommended against the existing Rs 7,000.

# Based on Minimum Pay, fitment factor of 2.57 approved for revising pay of all employees uniformly across all Level: Jaitley.

# Recommendations will be implemented from January 1, 2016. And the arrears will also be payed this year. Covers 47 lakhs employees and 53 lakh pensioners: Jaitley.

# When 5th Pay Commission recommendations were submitted, it took the then government 19 months to implement them: Jaitley.

# Cabinet approved NMEP. To accelerate exploration activity through enhanced participation of private sector: Jaitley.

# Approved proposal to allow women to work in nights: Jaitley.

# Cleared Model Law — malls and movie theaters can remain open 24*7: Jaitley.

# Cabinet approves Revised Cost Estimates for 8 New IITs at Bhubaneswar, Gandhinagar, Hyderabad, Indore, Jodhpur, Mandi, Patna and Rupnagar.

# Accepted recommendations to regulate working hours of those working in Malls and stores: jaitley.

# Approved three proposals regarding national highways Punjab, Odisha and Maharashtra: FM Arun Jaitley.

“We are waiting for more details after the acceptance of the report,” Ashok K Mathur, Chairman 7th Pay Commission, said, adding “at present it appears that the report as given by me seems to have been accepted in toto.”

“This will involve additional expenditure for the Govt in terms of 1,02,100 crores,” Mathur said.

Over one crore Central government employees, past and present, will benefit from the 7th Pay Commission recommendations approved by the Union Cabinet on Wednesday. The panel, headed by Cabinet Secretary P K Sinha, had recommended an overall hike of 23.5 per cent, but it is not immediately known what hikes have been cleared for the employees with effect from January 1, 2016. The central government has 50 lakh serving employees and 58 lakh pensioners.

If the recommendations are accepted as it is, it would mean a financial burden of Rs 1.02 lakh crore, about 0.7 per cent of the GDP.

A secretaries’ panel, headed Cabinet Secretary P K Sinha, has already vetted the 7th Pay Commission recommendation and its report is being translated into a note for Cabinet.

“It in most likelihood will come up before the Cabinet tomorrow (Wenesday),” an official had said.

The government had in January set up the high-powered panel to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.

The Commission had recommended 23.55 per cent overall hike in salaries, allowances and pension involving an additional burden of Rs 1.02 lakh crore or nearly 0.7 per cent of the GDP.

Source:-https://wopostbank.blogspot.in/2016/06/updates-7th-pay-commission-all-over-in.html

23.55% salary hike likely for central govt employees

23.55% salary hike likely for central govt employees–Economictimes

The much-anticipated Seventh Pay Commission bonanza for the government employees is likely soon with the Union Cabinet set to consider the panel’s recommendations on Wednesday.

The committee of secretaries tasked with reviewing the recommendations has given its report that would be considered by the government before deciding on the final award.

The Seventh Pay Commission has announced 23.55% increase in pay and allowances of serving central government employees and 24% ..

Read more at: http://economictimes.indiatimes.com 

7th Pay Commission Pay Calculator for Defence Personnel

7th Pay Commission Pay Calculator for Defence Personnel

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7th Pay Commission Pay Calculator for Defence Personnel

7th Pay Commission Pay Calculator for Defence Personnel

Please click Below link


Click Here


Source:-http://7thpaycommissionnews.in/7th-pay-commission-pay-calculator-for-defence-personnel/

7th Pay Commission: Big Hike Cleared For Around 50 Lakh Government Employees

HIGHLIGHTS

1. Pay Commission recommended 23.55% hike in salaries, allowances, pensions
2. The move will impact nearly 50 lakh employees and 58 lakh pensioners
3. Many senior government officials will now draw higher salaries than MPs

 A big pay hike for over a crore government employees and pensioners was cleared by the cabinet on Wednesday.

With this raise, several senior government officials will draw a higher salary than lawmakers in Parliament.

Salaries and allowances will rise by at least 23.5 per cent, which had been recommended by the 7th Pay Commission - the panel that decides on government salaries.

The hike - the lowest in the last 70 years - is expected to cost the taxpayer an additional Rs. 1 lakh crore annually, or nearly 0.7 per cent of the GDP.

The move will impact nearly 50 lakh employees and 58 lakh pensioners. The changes will be effective retrospectively from January 1 this year.
 
The raise is built around a 14.27 per cent hike in basic pay.

Rs. 73,650 crore of the total payout will come from the general budget, while Rs. 28,450 crore will come from the railways.

The previous pay panel had recommended a 20 per cent hike which was eventually doubled when it was implemented in 2008.

The highest pay is pegged at Rs. 2, 25,000 per month for apex scale and Rs. 2,50,000 per month for cabinet secretary and others at the same pay level.

The rise will be more than double as the current pay in this scale is Rs. 90,000 per month.

The move has led to the discontent among the lawmakers who allege disparity with government officers. To address their resentment, the government is also considering a hike in salaries and allowances of lawmakers.

The minimum pay recommendation is Rs. 18,000 per month. This too is more than double of the present Rs. 7,000.

Sources say Finance Minister Arun Jaitley has made provisions for the payout.

Though the government is making an effort to increase revenue by bringing more under the tax net, the payout will reduce its kitty. The Centre also needs about Rs.70,000 crore to meet the One Rank One Pension (OROP) commitment for the armed forces.

On the flipside, the huge payout will boost demand at a time the economy is sluggish.

While some believe additional cash in the market may fuel an inflationary trend, experts say that the impact of the pay hike may become a turning point for the Prime Minister Narendra Modi's government to trigger.
https://wopostbank.blogspot.in/2016/06/7th-pay-commission-big-hike-cleared-for.html

7th Pay Commission: No annual increment for non-performing Central govt employees

7th Pay Commission: The Commission has also recommended introduction of the Performance Related Pay (PRP) for all categories of central government employees.

The Seventh Pay Commission has recommended that Central government employees should not be allowed to earn annual increments if they fail to meet performance criterion. For this, it has sought upgradation of performance benchmark to “very good” from “good” level.

The Commission has also recommended introduction of the Performance Related Pay (PRP) for all categories of central government employees.

The panel said, “There is a widespread perception that increments as well as upward movement in the hierarchy happen as a matter of course. The perception is that grant of Modified Assured Career Progression (MACP), although subject to the employee attaining the laid down threshold of performance, is taken for granted.”

“This Commission believes that employees who do not meet the laid down performance criterion should not be allowed to earn future annual increments. The Commission is therefore proposing withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service. This will act as a deterrent for complacent and inefficient employees. However, since this is not a penalty, the norms for penal action in disciplinary cases involving withholding increments will not be applicable in such cases. This will be treated as an efficiency bar,” it said in the report submitted to the government

Cabinet clears 7th Pay Commission, higher salaries seen boosting urban demand

The Cabinet has cleared all recommendations made by the Seventh Pay Commission report that will result in about 23.55 percent overall increase in salaries, allowances and pension for more than 1 crore government staff and pensioners. The move is expected to give a big boost to the economy as consumption demand in urban areas is likely rise owing to the rising income levels.

In January, the government had set up a high-powered panel headed by Cabinet Secretary PK Sinha to process the recommendations of the 7th Pay Commission which will have a bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.

Representational image. Reuters

The Sinha committee has submitted its report on the recommendations, a PTI report said.

Here's a quick look at the recommendations and the likely implications for the economy:

The recommendations

The Pay Commission recommended 23.55 percent overall increase in salaries, allowances and pension. This is estimated to put an additional burden of Rs 1.02 lakh crore, or nearly 0.7 percent of the GDP, on the government.

The panel recommended a 14.27 percent increase in basic pay, the lowest in 70 years. (A CNBC-TV18 report said citing a government official that the the cabinet has cleared a 20 percent minimum pay hike and 25 percent maximum.)

The minimum pay in government is recommended to be set at Rs 18,000 per month. This is more than double the present Rs 7,000.

The maximum pay is set at Rs 2,25,000 per month for apex scale and Rs 2,50,000 per month for cabinet secretary and others at the same pay level (as against the current Rs 90,000 per month).

In order to bring in greater transparency, the report has recommended replacing the present system of pay bands and grade pay with a new pay matrix.

Of the total financial impact of Rs 1,02,100 crore, the increase in pay would be Rs 39,100 crore, increase in allowances Rs 29,300 crore and increase in pension Rs 33,700 crore.

Also, Rs 73,650 crore of the outgo will be borne by the general budget and Rs 28,450 crore by the Railway Budget.

Implications for economy

The Pay Commission recommendations, once implemented, are expected to boost the consumption demand, and in turn growth.

As R Jagannathan argued in this article, the recommendations could turn out to be an opportunity for prime ministerNarendra Modi as the "dash of additional expenditure may be just the prod required for restarting the virtuous cycle of consumption, investment, growth, profits and all the related paraphernalia".

However, there are other issues. It is going to increase the general expenditure of the government. When these recommendations were made, inflation was moderate. But the actual implementation of these recommendations is coming at a time when inflation is rearing its head again. So, there are chances that a spike in demand supported by higher pay to the government staff may just push the inflation further up.

It also has to be remembered that crude oil prices that were benign a while back are not so now. The prices for crude are seen around $50 dollar a barrel now and a further increase cannot be ruled out. However, the only thing that may come to the rescue is a Brexit-induced global demand slowdown that will keep the commodity prices, including that of crude, under check.

The Reserve Bank of India, in its last policy statement, had raised these concerns while saying the surprise rise in April inflation has rendered uncertainty its future trajectory.

"...There are upside risks – firming international commodity prices, particularly of crude oil; the implementation of the 7th Central Pay Commission awards which will have to be factored into projections as soon as clarity on implementation emerges; the upturn in inflation expectations of households and of corporates; and the stickiness in inflation excluding food and fuel," it said.

Above all, a PTI report said citing sources that the secretaries’ panel may have recommended higher pay increase, with minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 3.25 lakh.

If the government approves this, the outgo will increase further and so will the burden on government expenditure. It will also have serious repercussions on fiscal deficit of the government which has been set at 3.5 percent of GDP.

Past experience

However, Richa Gupta, senior economist, Deloitte India, thinks the net impact of the implementation of the recommendation is going to be positive on the economy.

"Overall, there are three aspects: once implemented the recommendations will result in an increase in urban demand; this may in turn lead to higher inflation and put a burden on the government spending. But past experiences tell us that the net impact of pay commission implementation has always been positive," she said.

Also, it is to be noted that the global economy may continue in a rough patch due to Brexit. In such a scenario, the only factor that could help India is the domestic demand and a 23.55 percent compensation hike for government staff will only help, Gupta added.

Source:-http://wopostbank.blogspot.com/2016/06/cabinet-clears-7th-pay-commission.html