7th Pay Commission – Historic salary hike – says Arun Jaitley

7th Pay Commission – Historic salary hike – says Arun Jaitley – “The 7th Pay Commission report will be effective from January 1”, he said.

7th pay commissionFinance Minister Arun Jaitley on Wednesday took to Twitter to announce the Union Cabinet’s decision approving the 7th Pay Commission recommendations.

In a tweet, Jaitley said: “Congratulations to central government officers, employees & pensioners on a historic rise in their salary & allowances through the 7th CPC.”

“The 7th Pay Commission report will be effective from January 1, he said, adding that the Cabinet will decide if the arrears for the six months have to be paid in one go or in installments”.

“Salaries have to be respectable in order to attract the best talent,” Jaitley said, adding that the recommendations of the 7th Pay Commission will be implemented from January 1, 2016.

He further added, “when people get more money, it comes back in the system in the form of taxation. Savings will increase … spending will go up”.

Here are the highlights from Finance Minister Arun Jaitley’s press conference on Wednesday evening

* Minimum pay of Rs 18,000 has been recommended against the existing Rs 7,000 per month.

* Rs 2,25,000 per month is the maximum pay for apex scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

* Based on the minmum pay, a fitment factor of 2.57 is being proposed to be applied uniformly for all employees.

* The rate of annual increment is being retained at 3 per cent.

* The commission has recommended abolishing 52 allowances altogehter.

* Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances.

* The total financial impact in the FY 2016-17 is likely to be ₹1,02,100 crore.

* Gratuity ceiling doubled from Rs 10 lakh to Rs 20 lakh and housing loan allowance hiked from Rs 7.5 lakh to Rs 25 lakh.

* Two dates of increments in place of existing one – 1st Janunary and 1st July.

* Ex-gratia lump sum compensation and military service pay increased.

* Existing rates of monthly contribution towards Group Insurance to continue.

* Grade Pay & Pay Band structure to be replaced by Pay Matrix, comprising 19 Levels.

* Total annual burden of pay, pensions and arrears of 7th Pay Commission recommendations stands at Rs 1,02,100 crore.

Source: IE