The government has decided to pay its employees arrears arising from the implementation of the 7th Pay Commission recommendations in cash with the August salaries.
The government has already notified the 2.57-time hike in basic salary of the about 10 million government employees and pensioners as per the 7th Pay Commission recommendations. The pay hike has been made effective from January 1, 2016.
The finance ministry said the revised pay structure will include dearness allowance of 125% provided in the pre-revised pay structure. The rate of the first instalment of DA under revised pay will be announced later.
“The arrears as accruing on account of revised pay consequent upon fixation of pay under CCS (RP) Rules, 2016 with effect from January 1, 2016, shall be paid in cash in one instalment along with the payment of salary for the month of August, 2016, after making necessary adjustment on account of GPF and NPS, as applicable, in view of the revised pay,” a finance ministry statement said.
In order to expedite disbursal of arrears, the instruction said the “arrear claims may be paid without pre-check of the fixation of pay in the revised scales of pay”.
However, it added, the facilities to disburse arrears without pre-check of fixation of pay will not be available for those public servants who have retired, resigned or dismissed after the date of implementation of the Pay Commission recommendations.
The minimum pay in central government with effect from January 1, 2016 will now be Rs 18,000 per month, up from Rs 7,000. At the highest level of cabinet secretary, the salary would go up from Rs 90,000 a month to Rs 2.5 lakh.
There shall be two dates for grant of increment — January 1 and July 1 every year — instead of the existing July 1 only.
The instruction further said income tax would be deducted before the payment of arrears.