7th Pay Commission: 2 reasons, why CG employees will get hike and 2 reasons why they won’t

New Delhi, Aug 10: The Central Government employees are pinning all their hopes on a major announcement which may be made relating to the 7th Pay Commission.

The CG employees expect that on August 15 they would get some good news regarding a hike in basic pay. There are reports which suggest that an announcement may take place on August 15.

Let us analyse the possible scenarios, on why a hike could be given and why a hike may not happen too.

First and foremost the inflation has been rising and this is eating into the salaries of the employees in a big way. Hence, if the government decides to look at this matter passionately, it would have to increase the salaries of the CG employees, beyond what the 7th Pay Commission had recommended.

Secondly, there was this assurance given by Finance Minister, Arun Jaitley. He had said that he would look into the demands and take a favourable decision. He was away owing to health issues for sometime and, but is back now. If he holds discussions in this regard and is able to come to any conclusion, then a possible announcement could be made 4 days later.

Thirdly, the economy is looking positive. This could lead to the announcement of a hike. Moreover if the CG employees are paid better, then they would spend more, which will only help the economy better.

While these are the positives, now let us list out the negatives regarding the issue. Recently the Parliament was informed that there is no proposal to increase the basic salaries beyond what the 7th Pay Commission had recommended. While that had come as a major jolt, there was some course correction and at a recent meeting with employees the issue was raised. The government said that it would consider the issue after taking into consideration, the financial implications.

The other damper is the RBI hiking the repo rate fearing a spike in inflation. The RBI also mentioned the 7th Pay Commission based HRA among the various causes that led to the rise in inflation. If this is considered by the government then there may be no positive announcement relating to the 7th Pay Commission.