7th Pay Commission: Another RBI study likely to stand in the way of pay hike
New Delhi, Aug 18: The speech from the ramparts of the Red Fort clearly did not bring any joy for the Central Government employees who were waiting for good news regarding the 7th Pay Commission.
They were expecting a major announcement, but there was none. As a result of this the painful wait for an announcement on the hike in basic minimum pay and fitment factor would continue.
Now this brings us to the question as to whether there would really be a pay hike beyond the recommendations of the 7th Pay Commission. Some believe that there could be some announcement, but others believe that there would be none at all. Several persons that OneIndia spoke with appeared to be confused.
One person even said, " I have been hearing that there would be a pay hike. However there is nothing confirmed." Another said, " I am sure that there would be announcement, but it is likely to happen only in November. All BJP ruled states are implementing the 7th Pay Commission recommendations and I do not see why the Central Government will not make any announcement in this regard," he also said.
During the deliberations within the government, it has been said that the likely roll out of a pay hike could be expected and the fitment factor may be 2.80. As per the ongoing discussions, the government may announce a pay hike with the fitment factor 2.80 instead of 2.57.
The 7th Pay Commission had used fitment factor with which the basic pay in the 6th Pay Commission is multiplied for the basic pay of the 7th Pay Commission.
The 7th Pay Commission had recommended the minimum pay from Rs 7,000 to Rs 18,000 a month with a fitment factor of 2.57. The pay panel had also recommended a 14.27 per cent hike in the basic pay at the junior levels, which incidentally is the lowest in 70 years.
Meanwhile an RBI study has found that the controversial note ban imposed in November 2016 has led to further decline in the already falling credit to the MSME sector, while GST rollout has not made any significant positive impact on overall credit to the sector but has deeply dented their exports.
The credit disbursal to the MSME sector has, however recovered a tad since the lows of 2017 to reach the mid-2015 level, notes an RBI report called the Mint Street Memo.
Though micro-credit, including loans by banks and NBFCs to the sector has grown in recent quarters, exports have been hit badly since the GST implementation. These are also factors that may stand in the way of going beyond the 7th Pay Commission recommendations.