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Friday, Aug 15, 2008
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Business Daily from THE HINDU group of publications Friday, Aug 15, 2008 ePaper | Mobile/PDA Version | Audio |
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Human Resources Government - Policy Web Extras - Budget Central Govt staff get pay hike as I-Day gift Minimum basic pay increased to Rs 7,000 Will cost exchequer Rs 17,798 crore annually Revised pay scales with effect from Jan. 1, 2006 Our Bureau New Delhi, Aug. 14 The much-awaited bonanza for over five million Central Government employees to move into higher pay scales became a reality on Thursday, with the Union Cabinet approving the implementation of the recommendations of the Sixth Central Pay Commission after some modifications. With this decision, Central employees, including the Armed Forces and Railways, are to get pay hikes averaging 21 per cent from September this year. The revised pay scales will come into effect from January 1, 2006 and revised rates of allowances from September 1, 2008. Arrears would be from January 1, 2006 to August 31, 2008. The fiscal impact this year on the Budget would be Rs 15,717 crore. In the case of railway budget, the fiscal impact for the current year is Rs 6,414 crore, the Information and Broadcasting Minister, Mr Priyaranjan Dasmunshi, told reporters after a Cabinet meeting. He also said that arrears, amounting to about Rs 29,000 crore, would be paid in cash in two instalments — 40 per cent during the current year (2008-09) and the remaining 60 per cent in the next financial year. The Expenditure Secretary, Ms Sushma Nath, said that the higher salaries will cost the exchequer Rs 17,798 crore on an annual basis. The Union Finance Minister, Mr P. Chidambaram, later said that the total liability on account of the pay hike, after the latest modifications, was Rs 22,131 crore for 2008-09. “The Central Budget has the capacity to bear Rs 15,717 crore and railway budget can also bear Rs 6,414 crore. Budget targets (on deficits) will be adhered to. We had already factored in that there will be a payout on the Pay Commission report. This is not a new development,” Mr Chidambaram said. Mr Dasmunshi said that the new system of four pay bands with 20 grade pays recommended by the commission has been accepted with some minor modifications. The minimum basic pay for a government servant has been increased to Rs 7,000 from Rs 6,660. Consequently, the total emoluments of an employee at the lowest level will exceed Rs 10,000 a month including allowances. The modifications to the CPC recommendations include enhancement in the fitment in revised price bands, which was recommended by CPC to be based on multiplication factor of 1,74 to 1.86 per cent. This would result in increased emoluments for Government employees. The Cabinet also approved an increase in the rate of annual increment from 2.5 per cent to 3 per cent. Besides removal of campus restriction for grant of transport allowance, increase in transport allowance has also been approved. At least three promotions have been assured for all defence forces’ personnel and civilian employees under the modified assured career profession (ACP) scheme. While the civilians would get it after 10, 20 and 30 years of service, the defence forces jawans would get ACP in 8, 16 and 24 years. For the armed forces personnel, the Commission had for the first time recommended a military service pay (MSP). The Cabinet has increased the rate of MSP for certain grades to Rs 2,000 from Rs 1,000 recommended by the Commission. The officers of defence forces would get MSP of Rs 6,000 over and above their pay. Recommendations of the Sixth Pay Commission — Fulfilling its mandate Make defence chiefs among the highest paid: Pay panel Sixth Pay Commission — More of the previous panel? Do the Mandarins deserve a new deal? Sixth Pay Commission — A financial noose round Government's neck? More Stories on : Human Resources | Policy | Budget
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