Govt In Dilemma Over 7th Pay Commission Notification

New Delhi: The Finance Ministry official involved with the process of pay hike told The Sen Times on condition of anonymity that government is facing the classic dilemma on the subject of issuing of notification of implementation of 7th pay commission recommendations.

Union Finance Minister Arun Jaitley assured the unions leaders that the issues raised by them would be considered by the High Level Committee.

He lamented that the 7th pay commission recommendations has been approved by the cabinet on June 29, but has yet to implement because it takes time for hiking of minimum pay, which has been demanded by the central government employees unions.

The Finance Ministry and the Prime Minister’s Office (PMO) are seeking to issue the notification of implementation of 7th pay commission recommendations shortly as approved by cabinet.

On the other hand, if faced with the dilemma of having to accept central government employees unions demands of hiking minimum pay and fitment factor through a high-level committee, the government would likely opt for the latter. The Finance ministry in its statement said, high-level committee will submit its report within four months with assistance from Finance ministry, but it appears that it may take time more than four months.

The Union Home Minister Rajnath Singh, Finance Minister Arun Jaitley and Railways Minister Suresh Prabhu assured the unions leaders that the issues raised by them would be considered by the High Level Committee, which will soon be set up.

The Cabinet ditto with the 7h Pay Commission recommendations, the commission recommended 23.55 per cent hike in salaries, allowances and pensions and a 14.27 per cent increase in basic pay for Central government employees, the lowest in 70 years.

The cabinet has increased the minimum pay from existing Rs 7000 to Rs 18,000 while the central government employees’ unions are demanding minimum pay Rs. 26,000. The cabinet took fitment factor 2.57 to hike basic pay only 14.27 per percent but the employees’ Unions are demanding 3.68 fitment factor.

This is despite the fact that pay hikes have a greater impact on the exchequer, the government is bound to accept the unions demands.

Now, the government tactic is to delay implementation of 7th pay commission recommendations, so it is likely to have a ripple effect and devaluation of Indian currency likely to hit in coming months.

Source : PO Tools blog.