Govt might soon take final call on pay panel allowances

The Narendra Modi government is likely to take a final decision soon on revised allowances for the central government’s 4.7 million employees as recommended by the 7th pay commission (CPC).

A panel headed by Finance Secretary Ashok Lavasa is examining the suggestions. It is expected to have one of its last few meetings on Friday. The recommendations will then go to the government's political leadership. In fact, the Centre could announce revised allowances any time after March 11, the day of counting the votes for the five assembly polls, and probably before the second half of the Budget Session of Parliament ends, if a decision is taken by then, Business Standard has learnt from senior government sources.

In late June, after implementing the CPC proposals on salary and pension, Finance Minister Arun Jaitley had announced the Lavasa panel would examine the suggestions on allowances. It had time till October to give the report but this got delayed. The decision on allowances was postponed because the CPC wanted a number of these to be abolished or subsumed. Employee unions were opposed.

Some of these allowances the CPC had suggested be done away or subsumed were an acting allowance, assisting cashier allowance, cycle allowance, condiment allowance, entertainment allowances for the cabinet secretary, flying squad allowance, haircutting allowance, rajbhasha allowance, rajdhani allowance, robe allowance, secret allowance, shoe allowance, shorthand allowance, soap toilet allowance, spectacle allowance, Sunderban allowance, uniform allowance, vigilance allowance and washing allowance.

Of 196 allowances, the CPC report had recommended abolition of 52 and subsuming of another 36 into larger existing ones. A deferment on revising of allowances meant that as opposed to a burden of ~1.02 lakh crore as envisaged by the CPC, the government had provisioned for ~84,933 crore in 2016-17 for pay and pension, including ~12,000 crore in arrears. There are other recommendations on allowances which the panel led by Lavasa has been tasked with examining. These include a change in the present system of accounting, wherein pay and allowances are clubbed and it is difficult to bifurcate these.

The CPC recommended a separate object head for budgeting and accounting be used to record the expenditure.