The six-member cell set up in the department of expenditure, will be headed by a joint secretary and will complete its work in six months with effect from April 1, 2008, sources said.
The government had earlier set up a Committee headed by Cabinet Secretary to process the Sixth Pay Commission report before giving its final approval. Once the Cabinet approves the report, the cell will implement the report, the sources said.
Ever since inflation rose to a three-year high of over 7%, the government has been eager to implement the recommendations of the Central Pay Commission report at the earliest, sources said.
The pay panel has recommended an average hike of 28% in the salary of the central government employees, which is expected to benefit over 40 lakh persons.
The government is concerned that the armed forces, along with employees of the Railways and other departments are unhappy with the disparities in the pay commission's recommendations and have asked the Cabinet Secretary to submit the report at the earliest.
The implementation cell is also expected to look into timely flow of funds to all the Ministries, which is estimated at Rs 12,500 crore by the Pay Panel for 2008-09. The pay panel has estimated that the government would require additional about Rs 18,000 crore this year towards payment of arrears.