Salary hike under 7th pay panel unlikely to hit prices, says Economic Survey

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New Delhi, Feb 28: The increase in wages under the Seventh Pay Commission (7th PC) is unlikely to see a destabilising affect on prices and will have no impact on inflation, the Economic Survey said on Friday, Feb 28.

"For most of the current fiscal year, inflation has remained quiescent, hovering within the RBI's target range of 4-6 percent. But looming on the horizon is the increase in wages and benefits recommended for government workers by the 7th PC.


"If the government accepts this recommendation, would it destabilise prices and inflation expectations? Most likely, it will not," the survey, tabled in Parliament, said.

The pre-Budget document also gave the example of implementation of the Sixth Pay Commission to say the move barely led to inflation, owing to the grant of arrears.

"If the 6th Pay Commission award barely registered, the 7th Pay Commission is unlikely to either, given the relative magnitudes, even if fully implemented," it said.

The Survey noted expected the wage bill (including railways) will go up by around 52 per cent under the 7th PC vis-a-vis 70 percent under the previous commission.

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