Centre announces 23.5% hike for employees and pensioners

File Photo: Finance Arun Jaitley.

Union government Wednesday announced an overall increase of 23.5 per cent for over one crore government employees and pensioners in line with the Seventh Pay Commission’s recommendations.

The hike will be implemented with effect from January 1, 2016 and arrears will be paid during this financial years itself. Central government employees and pensioners will start received hiked payments from August this year.

The seventh paye commission had recommended increases of 16% in pay and 24 per cent in pensions, an over all hike of 23.5% in its recommendations given in November 2015.

The starting salary for new recruits at the lowest level has been raised to Rs. 18,000 from Rs. 7,000 per month.

Freshly recruited Class I officers will receive Rs. 56,100. This reflects a compression ratio of 1:3.12 signifying that the pay of a Class I officer on direct recruitment will be three times the pay of an entrant at the lowest level.

File Photo: Prime Minister Narendra Modi with Finance Minister Arun Jaitley. The government gave big relief to central employees and pensioners but the central unions have rejected it and threatened to go on strike.

File Photo: Prime Minister Narendra Modi with Finance Minister Arun Jaitley. The government gave big relief to central employees and pensioners but the central unions have rejected it and threatened to go on strike.

The maximum pay, drawn by the Cabinet Secretary, is Rs. 2.5 lakh per month (against the current Rs. 90,000), higher than the salaries drawn by MPs.

Government has constituted a committee to look into the issue of allowances.

An anomaly committee will also be constituted to look into any anomalies and suggest corrective measures.

Implementation of the recommendations will cast additional burden of over Rs. 1.02 lakh crore in this finance year ending on March 2017.

However, confederation of central government trade unions has rejected the recommendations and threaten to go on strike.

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