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Government employees stage a demonstration to demand implementation of Seventh Pay Commission in New Delhi on June 24, 2016. While the Modi government approved and paid hike in the salary component as recommended by the Commission, it deferred a decision on allowances by referring it to a panel headed by finance secretary Ashok Lavasa on June 29, with a four-month deadline for submitting its views.
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The committee headed by finance secretary was formed in June to look at hike in allowances.
A panel set up by the Central government to look into proposals pertaining to allowances of government employees, including defence personnel, made by the 7th Central Pay Commission (CPC) is likely to submit its report shortly, raising expectations for about 1 crore individuals.
The announcement of the panel to be headed by Finance Secretary Ashok Lavasa was made on June 29, 2016 when the government accepted the salary hike rates as proposed by the pay commission.
The 7th CPC had recommended scrapping 51 allowances and subsuming another 37 after examining the existing 196 allowances that are currently paid.
Given the significant changes in the existing provisions for allowances which may have wide ranging implications, the Cabinet had decided to constitute a committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on Allowances.
"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," an official statement issued by the finance ministry said.
The government has already released the salary and pension arrears for the period January to July 2016 and started paying salaries after factoring in the hike from August onwards. A decision on payments to the armed forces was taken recently.
The recommendations of the 7th CPC are applicable to 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh retirees are from the defence forces.
The acceptance of the salary hike proposals by the Narendra Modi government had triggered similar pay hike by Central public sector undertakings (CPSUs) who joined the nationwide strike on 2 September, 2016.
Besides, employees of state governments have also started similar pay revision. The Karnataka government have almost accepted the demand made by the 6.40 lakh state government employees for appointing a panel to consider salary hike.
