Pay Commission wants 16-percent hike in salaries

New Delhi: An estimated 47 lakh serving central government employees and 52 lakh pensioners, including defence personnel, on Thursday had reason to cheer with the 7th Pay Commission recommending a 16-percent salary hike.

Pay Commission chairman Justice A.K. Mathur who submitted the report to Finance Minister Arun Jaitley here on Thursday said the proposals will entail an outflow of Rs.102,100 crore from the exchequer during the next fiscal.

The 'One Rank One Pension' proposal is also recommended for all employees, including the defence personnel, retiring before January 1 next year.

The commission also recommended a 24-percent hike in pension, besides a minimum pay of Rs.18,000 per month for all entry-level employees and Rs.2.5 lakh for the seniormost serving officer, the cabinet secretary.

"The increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent," Justice Mathur said, adding that an annual increment of 3 percent has also been recommended.

Soon after the submission of the report, Jaitley told reporters here that a secretariat to implement the pay commission recommendations will be set up under the expenditure secretary.

A separate empowered committee of various departments will examine the recommendations.

"The recommendations will be examined expeditiously and the government will take a final decision," Jaitley added.

"The commission recommends a revised pension formulation for civil employees including the Central Armed Police Force and defence personnel who have retired before January 1, 2015," it said.

"This will bring about complete parity of past pensioners with current retirees."

A far reaching recommendation is to abolish 52 allowances altogether. In the case of house rent allowance, the panel said since the basic pay was proposed at a much higher rate, such an emolument should be paid at the rate of 24 percent, 16 percent and 8 percent of the new basic pay for classes X, Y and Z cities, respectively.

"The commission also recommends that the rate of house rent allowance be revised to 27 percent, 18 percent and 9 percent when dearness allowance crosses 50 percent, and to 30 percent, 20 percent and 10 percent when it crosses 100 percent."

But the house building advance ceiling is proposed at Rs.25 lakh against Rs.7.5 lakh.

A health insurance scheme for central government employees and pensioners has been also been recommended. For serving personnel and pensioners outside the CGHS areas, a scheme must be implemented for cashless benefit.

The ceiling of gratuity is also recommended at a higher rate of Rs.20 lakh, against Rs.10 lakh. "The ceiling on gratuity may be raised by 25 percent, whenever dearness allowance rises by 50 percent."

In the case of defence personnel, against the existing pay of Rs.6,000 per month for service officers, the proposal is for Rs.15,500. This apart, short service commissioned officers will be allowed to exit the forces at any point between seven and ten years.

For those serving in the difficult Siachen glacier, the pay for service officers is proposed at Rs.31,500 per month, against Rs.21,000 per month now, and Rs.21,000 for junior commissioned officers, against the present salary of Rs.14,000.

To ensure productivity, the commission has recommended a performance- related pay for all categories of central government employees, based on certain parameters, including annual performance appraisal reports, which will subsume the existing bonus scheme.

There are also a few recommendations where there was no unanimity among the members, like on the removal of the edge enjoyed by the members of the Indian Administrative Service over their foreign affairs counterparts.

Also, the age of retirement of 60 years suggested by the chair and member Rathin Roy was not agreed to by another member, Vivek Rae.