The Union cabinet on Wednesday approved up to 15% hike in basic salaries of central government staff and similar big raises in allowances and pensions that will benefit some 10 million employees.
Here are details of the decisions from the cabinet meeting announced at a news briefing held by finance minister Arun Jaitley:
- Recommendations of 7th Pay Commission to be implemented from January 1. Arrears will be paid this year.
- The 7th Pay Commission covers 47 lakh government employees and 53 lakh pensioners
- Based on minimum pay, fitment factor of 2.57 approved for revising pay of all employees uniformly across all levels. Minimum Pay of Rs 18,000 recommended against the existing 7,000 per month approved.
- 7th Pay Commission recommendations on allowances to be referred to a committee headed by secretary. Existing allowances will continue till the Committee takes a final decision
- Total annual burden of pay, pensions and arrears of the 7th Pay Commission recommendations is Rs 1,02,100 crore
- No deduction for group insurance from the salary as recommended by the Pay Commission
- Ex-gratia lump sum compensation and military service pay increased
- Existing rates of monthly contribution towards Group Insurance to continue
- Recommendations to be implemented within 6 months from due date
- The number of weak companies is declining, stressed ones deleveraging very fast: FM
- It is a mixed bag: FM on government’s decision regarding the pay panel recommendations
- Implementation of the 7th Pay Commission recommendations will increase demand and savings
- Salaries have to be respectable in order to attract the best talent: FM
- Govt salaries will be distinctively higher than market salaries after 7th Pay Commission: FM
- Gratuity ceiling doubled to Rs 20 lakh and housing loan allowance hiked from Rs 7.5 lakh to Rs 25 lakh: Finance secretary Ashok Lavasa
- Minimum pension increased from Rs 3,500 to Rs 9,000
- Government salaries are distinctively higher than private sector salaries after 7th Pay Panel so there should not be any protests: FM.