Union Finance Minister Arun Jaitley on Wednesday said the Seventh Pay Commission will bring a "historic rise" in the salaries of central government employees and pensioners, after the Union Cabinet approved the Commission's recommendations earlier in the day, reported The Indian Express. With this, at least 52 lakh pensioners and 47 lakh employees will get 23.6% hike in their pensions and salaries. The new pay structure will be in effect from January 1, 2016 and will cost the government around Rs 1,02,100 crore.
Addressing the press after the announcement, Jaitley said, "Salaries have to be respectable in order to attract the best talent." In November 2015, the pay panel had suggested a 14.27% hike in basic pay for employees working at a junior level. According to the new recommendations, the entry-level pay will be increased from Rs 7,000 per month to Rs 18,000 a month. The cap for salaries of those working at an apex scale level has been set at Rs 2.25 lakh per month, while that of Cabinet Secretaries will be Rs 2.5 lakh per month.
The panel has also suggested a fitment factor of 2.57% for all employees across the board. The gratuity ceiling will be increased from Rs 10 lakh to Rs 20 lakh, whereas housing allowance will now be Rs 25 lakh as opposed to the existing Rs 7.5 lakh. The Commission has also suggested two increments in a year instead of one. The dates for this will be January 1 and July 1.
The panel has also suggested an increase in ex-gratia lump sum compensation and military service pay. The aspects that remain unchanged include rate of annual increment and rates of monthly contribution towards Group Insurance.
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