7th Pay Commission: Will government raise minimum pay?

The pay rise, the finance ministry says, should take place in January, and would mean a pay rise for 4.8 million central government employees and 5.5 million pensioners. If the government decides to implement the rise, which it may do after the completion of Gujarat and Himachal Pradesh assemblies poll process, it would be the second successive pay hike, and would bring the real value of the minimum pay back in line.

A top Finance Ministry official, who did not wish to be named, indicated the government will be taking the proposal seriously, but cannot implement the pay rise now, it will be decided after the Gujarat and Himachal Pradesh assemblies elections.

This would represent minimum pay rise of Rs 21,000 for central government employees. If this recommendation were accepted, the value of the minimum pay would be higher than the recommendations of the 7th Pay Commission of Rs 18,000 and the government is now making good progress towards restoring the value it lost during the previous period of its cabinet nod, he said.

The National Anomaly Committee (NAC), which has been formed to look into pay anomalies arising out of the implementation of the 7th Pay Commission's recommendations, has to strike a delicate balance between what is fair for employees and what is affordable for the government, without costing jobs. It does so impartially and without political interference. It is important that it is able to complete to do its work before Gujarat and Himachal Pradesh elections, he added.

A rise in the minimum pay would be a good political move for the BJP, as it would bolster their argument on the cost of living debate for benefit poor and middle class, where Congress said that Modi government gave India achhe din with a broken GST and failed note ban.

Prime Minister Narendra Modi has killed the country's economy by firing "double tap" shots of note ban and GST into it, Congress vice president Rahul Gandhi said.

The economic experts are also worried about the GST and note ban’s effect on exchequer. If such a situation is not chaos, then how is government going to implement minimum pay Rs 21,000?

But the official has said that it is possible for the minimum pay to jump up to Rs 21,000 with fitment factor 3.00 to reap political gains for BJP in future, but such a rise is less likely now the the central government employees unions’ demanding for hiking minimum to Rs 26,000 with fitment factor 3.68. If fitment formula is tinkered with 3.00, the salary and pension in general for all segments of employees will go up.

Earlier, the government had given nod minimum pay from Rs 7,000 to Rs 18,000 per month with fitment factor 2.57 on the recommendations of the 7th pay commission. Finance Minister Arun Jaitley had also promised to raise minimum pay in a meeting with the central government employees unions leaders on June 30, 2016, the day after the cabinet approval of the 7th Pay Commission's recommendations.

TST