While the government has decided to hike the basic minimum pay beyond the 7th Pay Commission, there is not much clarity on the arrears.
Central Government employees who are hoping that the pay hike would come in January 2017 may not have much good news on the arrears front.
No arrears on basic minimum pay:
The government feels that the arrears on the basic minimum pay would not be a feasible option. The financial advisors to the government of India are of the view that arrears on higher minimum pay will bring an extra burden on exchequer
What is the alternatiive:
The government feels that instead of doling out arrears, it would be better to raise the basic minimum pay. This would mean that the government would raise the fitment factor from 2.57 to 3 times. A National Anomaly Committee (NAC) has been formed to scrutinise the pay panel's recommendations.
Last minute change:
While at first the government was thinking of giving arrears, the change in decision was prompted after the April-June GDP growth slipped to a three-year low of 5.7 percent. The government believes it will bounce back in the second quarter. Moreover the fiscal math this year was already burdened, the government points out.
Going beyond 7th Pay Commission:
The Union Cabinet will take up the matter of pay hike in the end of January 2018. The roll out of a higher minimum pay would come in effect from January 2018 onwards. However the latest news and updates regarding the 7th Pay Commission is that there would be a pay hike without arrears.