7th Pay Commission: Latest news, major relief for CG employees on August 15
August 15 could be a key day for all those 50 lakh Central Government employees awaiting a pay hike beyond the recommendations of the 7th Pay Commission. An announcement which could be positive in nature would be made from the Red Fort, sources say.
The source says that there is no reason why a hike in basic minimum pay should not be announced. For instance, the hike that was first accorded by the 7th Pay Commission has put some positive energy into the economy. The hike in HRA was crucial since it increased the spending and consumption which went on to benefit the economy.
Several economic advisors to the government say that hiking the pay would have a positive impact on the economy. This is being considered serious by the government and more importantly the government does not want to leave its employees awaiting good news on the 7th Pay Commission high and dry.
As per sources and reports two major announcements would be made on August 15 2018. First would be the increase in pay and rise in fitment factor. The second would be relating to increasing the retirement age of the employees. Currently the retirement age is 60 and this could be increased to 62. This announcement too would be made on Independence Day, sources also tell OneIndia.
"The implementation of HRA as per the recommendation of the 7th Pay Commission for central government employees from July 2017 and the possibility of its implementation at the state level should strengthen urban consumption demand. An offsetting impact on aggregate demand could, however, emerge if state governments restrain or scale down capital spending, keeping in view the objective of fiscal consolidation," the RBI said in its annual report for 2016-17.
The RBI report also said that the 7th Pay Commission was also one of the factors driving India's economic growth under Modi government since its implementation. The RBI had noted in its annual report 2016-17 that private consumption spending alone contributed 2/3rd of the growth of aggregate demand. In the absence of the implementation of 7th Commission recommendations and One-Rank-One-Pension (OROP) for defence personnel, India's growth could have been lower by 2 percentage points.
Currently the CG employees are getting basic pay as per fitment factor, 2.57. Fitment factor is a figure that is used by the 7th Pay Commission with which the 6th Pay Commission regime is multiplied in order to fix basic pay in revised structure. So the latest news and updates on the 7th Pay Commission is that good news will come on August 15, Independence Day.