7th Pay Commission: Hike now only in basic pay

New Delhi: The government is likely to implement soon the new pay structure for central government employees excluding allowances, the compensatory perks for all employees.

Though some central government employees oppose this exclusion, the finance ministry officials said the Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th Pay Commission on allowances including HRA, transport allowance.
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, they added.
No Dearness allowance (DA) will be paid in the new pay matrix (basic pay) as the existing dearness allowance 125 per cent has been merged with the new basic pay.
A fitment factor of 2.57 will be applied across all levels in the pay matrices. After taking into account the DA at prevailing rate 125 per cent, accordingly, the salary of all government employees will be raised by at least 14.29 % as on January 1. However, the rate of annual increment has been retained at 3%.
The Finance ministry placed the new wage structure in the cabinet on June 29, The cabinet gave nod for the implementation of the recommendations of the 7th Pay Commission on pay and pension benefits to 4.7 million central government employees 5.3 million pensioners. It will come into effect from January, 2016.
“The notification of 7h Pay Commission recommendations now will be issued shortly, so the central government employees will get the increased salaries under the new pay matrix from August,” according to the officials.
This means though the new pay structure has been in place since January 1, the central government employees will start drawing the increased salaries from August and the arrears will be paid during the current financial year.
However, there is resentment from Central government employees’ Unions in respect of minimum pay, they are demanding minimum pay Rs. 26,000 instead of Rs 18,000 and 3.68 fitment factor instead of 2.57. The government assured them to consider their demands through a High Level Committee, which will soon be set up and the government will take steps accordingly.
“It’s notification will be issued within one month after the decision of High level Committee coming stipulated time frame i.e. four months.
However, the notification on 7th Pay Commission recommendations, which has been approved by the cabinet, is under process in the Finance Ministry and the Finance Minister Arun Jaitley is pressing hard to issue it very shortly,” they told The correspondent.