7th Pay Commission recommendations being approved by PM Modi-led Cabinet will not only bring cheer to lakhs of government employees, but also to the housing sector.
7th Pay Commission recommendations being approved by PM Modi-led Cabinet will not only bring cheer to lakhs of government employees, but also to the housing sector, which is likely to see demand picking up in the coming months. Keki Mistry, CEO of HDFC has said that increase in rural and urban demand coupled with 7th Pay Panel implementation will lead to better housing demand.
In an interview with CNBC TV-18, Mistry said, “There will be more money in the hands of people. Good monsoon will feed rural demand and 7th Pay Commission will boost urban demand, this will cumulatively see a significant increase in overall demand.” “All this will money will obviously benefit housing,” he said.
“From an overall economic point of view, the capacity utilisation will start going up and I see a significant revival in investment cycle with a lag effect,” he said.
Talking about the housing sector he said, “Slow Down in housing has been large ticket size or large housing projects. Tier-II & Tier-III cities demand for housing has not come down.”
The Cabinet has approved a proposal to revise up salaries and pensions. According to sources, the government has approved a minimum pay hike of 20% and a maximum of 25%. The 7th Pay Commission’s recommendations are effective from January 1, 2016.
According to a government official the total impact of the 7th Pay Commission will be Rs 1.02 lakh crore. According to the recommendations, out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the Union Budget and Rs 28,450 crore by the Railway Budget.
The move is estimated to benefit nearly 10 million government employees.