Pay Commission bounty for Govt staff as Modi Govt implements salary hike; Ten things you must know

Union Finance Minister Arun Jaitley announced on Wednesday that the recommendations of the 7th Pay Commission will be effective from January 1, 2016. Here are the main recommendations 1)The key recommendations of the 7th Pay Commission is a 23.55 percent increase in salaries, allowances and pension of central government employees and pensioners, which is estimated to put an additional burden of Rs. 1.02 lakh crore on the exchequer annually or nearly 0.7 per cent of GDP. 2) The date of implementation for the recommendations is January 1, 2016 3) Minimum pay of a government servant will now be Rs 18,000 per month 4) Among the beneficiaries include 47 lakh government employees and 53 lakh pensioners. Out of this there will be 14 lakh serving defence personnel and 18 lakh pensioners among the defence personnel 5) The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000. 6) The minimum pay has been increased from Rs.  7000 to 18000 p.m.  Starting salary of a newly recruited employee at lowest level will now be Rs.  18000 whereas for a freshly recruited Class I officer, it will be Rs. 56100.  This reflects a compression ratio of 1:3.12 signifying that pay of a Class I officer on direct recruitment will be three times the pay of an entrant at lowest level. 7) Rate of increment has been retained at 3 %. This will benefit the employees in future on account of higher basic pay as the annual increments that they earn in future will be 2.57 times than at present. 8) The Cabinet also approved the recommendation of the Commission to enhance the ceiling of House Building Advance from Rs.  7.50 lakh to 25 lakh. In order to ensure that no hardship is caused to employees, four interest free advances namely Advances for Medical Treatment, TA on tour/transfer, TA for family of deceased employees and LTC have been retained. All other interest free advances have been abolished. 9) The Commission examined a total of 196 existing Allowances and, by way of rationalization, recommended abolition of 51 Allowances and subsuming of 37 Allowances. 10) The Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on Allowances.  The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates.