Pay panel report soon, Govt working on 20% hike

As the Sixth Pay Commission prepares to submit its report on March 20, a fortnight before deadline, the Finance Ministry has started working its numbers considering an average 20% increase in salaries of Central government employees.

The wage hike, after merging existing allowances with the basic salary, will range from 18 to 25% depending on the slab, sources told The Indian Express. The net impact will be 20%, they added.

Compared to the 200% hike recommended by the Fifth Pay Commission, the increase this time has been deliberately kept at a moderate level as the inflationary impact is anyways being neutralised since July 1996 through revisions in the Dearness Allowance.

These revisions, twice every year from January 1 and July 1, are in line with the formula advocated by the Fifth Pay Commission. A Central government employee's remuneration includes a basic salary, a 50% dearness pay merged with the basic and a 47% dearness allowance of the total.

Excluding the arrears that would accrue to the 55 lakh employees, the annual impact of the new wage jump is estimated at Rs 11,000 crore. The new scale will be effective from January 2006 but half of it could be compulsorily put away under the GPF to bring down the instant payout.

That is because although Finance Minister P Chidambaram provided for Rs 26,657 crore or 0.5% of the fiscal deficit as headroom for pay revision and arrears, the margin got reduced due to a supplementary demand for Rs 10,000 crore for the loan waiver of farmers.

Using the average wage hike of 20%, the Finance Ministry has estimated that its impact on states will be to the tune of Rs 46,000 crore.

Source : Express India

Cabinet looks into 6% DA for central staff

Within a week of a pro-people budget, the government has more to offer - 6 per cent increase in dearness allowance to Central government employees and interest subsidy on loans to the farmers. This is likely to come up before the Cabinet on Friday.

The move means that dearness allowance in the salary package of thousands of Central government employees would increase from 41 per cent to 47 per cent.

Just last September, the government had increased dearness allowance from 35 per cent to 41 per cent.

For the government, the 6 per cent hike would mean an additional burden of over Rs 1,500 crore on the exchequer. The allowance would be applicable from January 1, 2008, and would benefit over one crore Central government employees.

And let us wait for the Sixth pay commission report

No Interim Relief for Central Govt. Staff

Finally it is clear that there will not be any Interim Relief (IR) to the government employees.

The Sixth Central Pay Commission does not intend awarding an Interim hike (IR) in salaries of Central Government Employees, Finance Minister P. Chidambaram told the Rajya Sabha today (14/08/2007).

In a written reply, Chidambaram said that the commission has informed the Government that it expects to submit its final report within the stipulated date of April 4, 2008.

No interim report has therefore been contemplated.