23.5% hike proposed for 48 lakh govt staff

Report submitted to FM; 55 lakh pensioners will also benefit

NEW DELHI: In the new year, central government employees can look forward to fatter pay cheques and heftier allowances.

The seventh pay commission on Thursday recommended an average 23.55% increase in their salary, allowances and pension, a move that will benefit 4.8 million staffers and 5.5 million pensioners. The hike will be effective from January 1, 2016.

A minimum pay of Rs18,000 per month and a maximum of Rs2.5 lakh has been recommended by the commission, headed by justice (retired) AK Mathur, that presented its 900-page report to finance minister Arun Jaitley.

More cash in hand is likely to result in higher consumption by the government’s massive employee base, which accounts for a large segment of the Indian middle-class. More demand could boost the economy through higher spending on assets such as cars and housing.

The government usually accepts the broad proposals for pay revision — due every 10 years — and state governments usually respond with their own hikes.

Jaitley said a secretariat will be set up to implement the pay panel recommendations. A separate empowered committee of various departments will examine the suggestions of the panel.

“The recommendations will be examined expeditiously and the government will take a final decision,” Jaitley said.

The government’s spending on employee payouts will rise by R1.02 lakh crore. Of this, expenditure on salaries will go up by R39,100 crore and allowances by R29,300 crore, while revised pensions would R33,700 crore.

A fresh IAS recruit will get a basic salary of Rs56,000 a month against Rs23,000 currently, while a sepoy in the Indian Army will earn Rs21,700 per month from Rs8,460 currently. In addition, employees are paid dearness allowance and house rent among many other allowances.

If accepted, the new proposals will set R18,000 as the minimum pay of an employee on the central government’s rolls. At present the minimum salary is Rs7,000.

The total emoluments of a general helper — the lowest ranked employee — amount to Rs22,579, more than double that of his counterpart in the private sector, a study commissioned by the panel found.

The commission has proposed a change in the salary structure by doing away with the system of pay bands and grade pay and recommended “pay matrix”. It has also called for scrapping overtime allowance and interest-free loans to buy motor vehicles.

CONTINUED ON P6 RELATED REPORTS, P13