1. 7th Pay Commission on pay, pension: From minimum to maximum salary, top 8 points to ponder 

7th Pay Commission on pay, pension: From minimum to maximum salary, top 8 points to ponder 

The 7th Pay Commission on pay, pension and allowances of government servants expects a huge outgo and analysts have raised flags of their own - from red to green.

By: | New Delhi | Published: November 24, 2015 8:49 PM
7th pay commission

7th pay commission: The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the “Business As Usual” scenario. (Reuters)

The 7th Pay Commission on pay, pension and allowances of government servants expects a huge outgo and analysts have raised flags of their own – from red to green. Some say it is going to boost inflation to new highs as bureaucrats will hit the markets to shop-till-they-drop, others are saying it will be a booster shot for the industry, which has been hit by a slowdown. Be that as it may, we look here at the top financial implications and impact points of the 7th Pay Commission report:

1. Minimum pay, based on the Dr Wallace Aykroyd formula (nutrition), the minimum pay in government is recommended to be set at Rs 18,000 per month.

2. The total impact of the Commission‟s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in case of VI CPC.

3. The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the “Business As Usual” scenario.

4. Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs  29,300 crore and increase in pension would be Rs 33,700 crore.

5. Out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.

6. In percentage terms the overall increase in pay & allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 percent.

7. Within this, the increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent.

8.Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level. Recommended Date of implementation: 01.01.2016.

  1. Dr.T.V.Gopalakrishnan Krishnan
    Nov 24, 2015 at 3:55 pm
    Pay Revision is essential and what is recommended by the Pay Commission is reasonable and fully justifiable.However, the politicians and the bureaucrats have to realise that there are other segments of society, who are not given their dues and are suffering to make both ends meet. Further there are also pensioners retired from different organisations and their pensions have not been updated for decades despite the drastic changes in the living conditions and unimaginable increase observed in the cost of living. Give and take policy is more appreciable and the bureaucrats have to be broadminded not to themselves but for others also in the society.
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