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7th Pay Commission: Why only lower rung employees will have something to cheer about


New Delhi, Jan 15: All eyes would be on the next Cabinet meeting, where a decision relating to the 7th Pay Commission is expected.

With there being no chance of any major announcement in the interim budget, Central Government employees would keenly hope that some good news regarding a hike in basic minimum pay and fitment factor would come their way following the Cabinet meeting.

7th Pay Commission: Why only lower rung employees will have something to cheer about

The question is will some sops be doled out to all the CG employees? It is highly unlikely that the government would extend the benefits to all the employees. Finance Minister Arun Jaitley is keen on doling out sops to the lower rung employees.

7th Pay Commission: Why the next Cabinet meeting is very crucial for CG employees

This would mean that the government would leave out the middle rung employees. The pay panel had fixed Rs 18,000 as the basic minimum pay. This would mean that there would be some tinkering made to this figure. The employees have been demanding that the basic minimum pay be fixed at 26,000, a demand that the government has so far rejected.

Meanwhile there could be some good news on its way where the pension and tax exemptions are concerned. The government is likely to issue a new notification announcing new features in the pension scheme.

The government is likely to increase its contribution to employee pension to 14 per cent of basic salary from the existing 10 per cent.

Reports also suggest that the employees would get over 50 per cent of the last drawn salary as pension under the New Pension Scheme after retirement. However this would happen only if the employee does not commute any portion of the accumulated fund in the new pension scheme at the time of retirement and transfers 100 per cent to the annuity scheme.

While these tweaks are expected in another week or so, the big question still remains regarding the basic minimum pay. This is a major issue that has been haunting the CG employees and they would hope that the next Cabinet meeting would take into account their demands and increase the basic minimum pay, beyond what the 7th Pay Commission had recommended.

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