New Delhi, June 25: Modi government may delay most awaited Seventh Pay Commission as a result of Brexit fallouts. Reportedly, implementation of the 7th CPC could be delayed for 2-3 months in the wake of volatility in the markets following after Britain's decision to pull out the European Union.
As per media reports, it will take minimum 2-3 months for markets to gain its stability back. At a time when fiscal health is already under stress, government can't put more burdens on exchequer. Around Rs 1, 00,000 cr is needed to implement salary increment and arrears under Seventh Pay Commission scheme.
As per Zee News, "In order to stabilize overall outflows from the domestic equity markets, government needs to adopt wait-and-watch policy for another quarter before thinking of implementing the payout as any haste can further increase volatility in the market".
Earlier reports said that Government could implement Seventh Pay Commission from August 1. It was said that Central government Employees would get increment in their July salary and six months arrears in the month of October.
On Friday, Britain voted to quit the European Union after 43 years of membership, throwing the world markets in a tailspin and leaving European leaders worried over how to stem a rising Eurosceptic tide.
The vote rattled Indian financial markets too, shaving over 1,000 points, or 4 per cent, off a key equities index, while pulling the rupee just below the 68 mark to the dollar.
Both Finance Minister Arun Jaitley and Reserve Bank of India Governor Raghuram Rajan sought to calm the markets and said there was no cause for panic as India's economic fundamentals remained strong and along with other macro indicators.
"We are well prepared to deal with the short and medium term Brexit consequence -- strongly committed to our macro-economic framework with focus on stability," Jaitley tweeted from Beijing.
Rajan said investors need not panic over the rupee. "We are comfortable on foreign exchange reserves. We can use it when necessary."
(With inputs from agencies)