7th Pay Commission Report

7th Pay Commission report: Govt Considering to accept all recommendations


The 7th Pay Commission report, set up in January this year, is soon to be approved by Cabinet in its entirety. Official sources inform, the Centre may choose to disburse the increased allowances, although the pay increases that has been recommended by the 7th Pay commission will take into effect from January 1, 2016.

If the 7th Pay Commission revisions takes into effect from September 2016 (for e.g), the savings to the exchequer would be to the tune of Rs 11,000 crore. Also, if the railways also did the same, it will save them around Rs 3,800 crore.

The salary which will be revised after the approval of 7th Pay Commission report, will benefit more than 50 lakh government employees and 58 lakh pensioners. This is expected to boost consumption demand and moreover, it will help achieve higher economic growth in the financial year 2017. Allowances will see a sharp increase of 63%. Allowances take around half of the Centre’s salary bill. The overall rise in pay, allowances and pensions recommended by the 7th Pay Commission is 23.55%.

February Budget had given `53,500 crore towards the pay panel-induced overall rise in pay, allowances and pension (PAP) and also for the one-rank-one-pension scheme for the armed forces. Pay Commission had estimated this additional outgo in FY17 because of its award at `73,650 crore in its November 2015 report.

Finance secretary Ashok Lavasa said, “A Committee of Secretaries (headed by the Cabinet secretary PK Sinha), has finalised the report on 7th Pay Commission recommendations… and soon we will make a draft Cabinet note based on the 7th Pay Commission report”.

The report is expected to be tabled by the Cabinet on Wednesday, June 29.

7th Pay Commission Award

Pay Increase - 16%
Allowances Increase - 63%
Increase in Pension - 23.6%