7th Pay Commission cleared: A look at the facts & numbers -:- Equity Research

The Union Cabinet on Wednesday cleared the 7th Pay Commission recommendations. The report had suggested a 15 percent hike in base salaries of government employees. The average hike will be around 23-24 percent. The report was finalized by the Empowered Committee of Secretaries. Government officials have said that only salaries and hikes have been cleared by the government, which will spend Rs 52,000 crore over it in this fiscal. The 15 percent hike will be the lowest in 70 years. The 6th Pay Commission had recommended a 20 percent hike, which was doubled at the time of implementation in 2008.  The government may also have to shell out additional Rs 20,697 crore for the pay hikes. Arrears for the six months will be paid in tranches and impact of which will be Rs 20,787 crore. Burden of arrears will be felt by the government over next two quarters. The impact of Pay Commission will be 72 percent on the Finance Budget and 28 percent on the Railway Budget. The annual outgo on back of this is expected to be Rs 1.02 lakh crore. Some additional provisions have been made for the defence personnel. The Central Pay Commission is set up at regular intervals (usually every 10 years) by the government to review the existing pay structures for government employees. As many as 48 lakh central government employees and 55 lakh pensioners will be befitted thanks to this payhike.