Comrades.

Dr. Urjit R. Patel – Governor, Reserve Bank of India has said in a media conversation has made following observations in respect of Central Government employees which is published in Reserve Bank of India website:

1) The disbursement of salaries and arrears under the 7th Pay Commission award has not been disruptive to inflation outcomes.

2) The extension of two months given to the Ministry of Finance to receive the notification on higher allowances under the Commission’s award, could push its fuller effect into the next financial year rather than this financial year.

The above statement by the Governor, Reserve Bank of India clearly indicates the following:

A) The 7th CPC effect on the Government expenditure is minimal and doesn’t have any impact on the inflation and prices and there is scope for further improvement in fitment formula provided the Government is ready to consider the staff side demands.

B) The allowances will be revised only after February 2017 and come into effect in next financial year.

Only struggle is only the solution for the Central Government employees to get our main demands resolved such as revision of fitment formula and allowances.

Click here for RBI details

(P.S.Prasad)

General Secretary

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UNSTARRED QUESTION NO: 88

ANSWERED ON: 16.11.2016

Proposal for bail out

PRATHAP SIMHA

Will the Minister of

RAILWAYS be pleased to state:-

(a) whether railways has initiated a proposal for the bail out to foot higher wage bill from the Finance Ministry, including waiver of dividend payment;

(b) whether Railways is 8-10% short of revenue target during the 1st quarter of the current financial year;

(c) whether Railways has also requested Finance Ministry to share the Service Tax collected from railway services, if so, whether Finance Ministry has acceded to proposal of Railways;

(d) whether Railways has also requested Ministry of Defence and Ministry of Social Justice and Empowerment to provide for the concessional tickets offered to defence personnel and Persons with Disabilities, if so, response of these Ministries to share the subsidy burden; and

(e) the measures being taken by the Ministry to implement 7th Pay Commission award?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF RAILWAYS

(SHRI RAJEN GOHAIN)

(a) & (b): Impact of implementing recommendations of the 7th Central Pay Commission on pay and pension assessed to be around Rs.20,000 crore annually has been provided in the expenditure budgeted for 2016-17. However, in view of trend of shortfall in earnings in the current year which in the Ist quarter fell short of the proportionate target by Rs.6,755 crore (14.8%), some steps need to be taken to avoid eventuality of having inadequate resources to meet the expenditure. These may, besides increasing earnings & economy measures to curb expenditure; include deferring the payment of dividend, seeking help of the Ministry of Finance for reimbursing cost of social services obligation being borne by the Railway, etc.

(c) & (d): No request as such has been made to Ministry of Finance, Ministry of Defence & Ministry of Social Justice and Empowerment.

(e): The recommendations of the 7th Central Pay Commission as approved by Government have been implemented on Railways.

Source: http://164.100.47.190/loksabhaquestions/annex/10/AU88.pdf

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Bhopal: Madhya Pradesh Chief Minister Shivraj Singh Chouhan on the Independence Day announced to give state government employees salary and allowances as recommended by the 7th Pay Commission.

Presiding over the state-level function on the occasion of the 70th Independence Day at the Motilal Nehru Stadium in the state capital, he said the state government will soon give its employees the 7th Pay Commission award.

He also said the daily wagers confirmed in service would be suitably adjusted in various departments according to their qualifications.

Chouhan added that an ‘employment cabinet’ would be formed with an aim to provide more and better job opportunities to the youths in the state. This panel will work for job creation in the state.

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New Delhi: Finance Minister Arun Jaitley has promised to consider to hike the minimum pay of central government employees beyond Rs 18,000, a day after the cabinet cleared 7th Pay Commission award for its employees.

Central government employees have been demanding hike in minimum pay since November 19, when 7th Pay Commission headed by Justice A K Mathur submitted its report to Jaitley.

The Finance Minister said he was not ‘rigid’ on the issue and the government will try to rectify some of employees’ demands including minimum pay.

Jaitley met with representatives of central government employees unions at Home Minister Rajnath Singh’s house for two hours till 11pm on Thursday night.

Jaitley, Rajnath Singh and Railways Minister Suresh Prabhu attended the meeting and assured unions leaders of central government employees that their demand would be looked into.

“The minimum pay of central government employees Rs 18,000 was made on recommendations of the 7th Pay Commission. But government will consider hiking it after discussions with all stakeholders,” he said in the meeting.

“Three ministers called us and we met them at Home Minister Rajnath Singh’s house late on Thursday for almost two hours. We have been assured that the minimum pay issue is going to be referred to one of two committees that the government is setting up to rectify any anomalies in the pay commission recommendation implementation,” Shiv Gopal Mishra, General Secretary of the National Joint Council Action (NJCA), a confederation of several central government employees’ unions, told reporters after the meeting.

The council claims a membership of 3.3 million, including the central government employees – Railways, Defence, Postal, Income Tax, Central Customs and Central Excise etc.

NJCA already have rejected Modi government’s overall 23.5 percent pay hike bonanza based on 7th Pay Commission recommendations and would go on indefinite strike from 6 am, 11 July.

They have been demanding Rs 26,000 as minimum pay instead of Rs 18,000 approved by the government based on the 7th Pay Commission’s recommendations.

Mishra also said the Home Minister assured them that “their interaction with us has the blessings of PM Narendra Modi”.

“On minimum pay, we are for a negotiated settlement and it seems there is some consideration at the highest level,” he added.

The increasing the minimum pay will change the salary fitment factor. If the minimum pay is hiked from Rs.18,000 to even Rs.20,000, the fitment factor will be higher than the 2.57 times approved by the government based on the pay commission recommendations.

If the 2.57 fitment formula is tinkered with, then salary and pension in general for all central government employees will go up.

NJCA wrote to all central government employees unions that “government has proposed to refer the issue of minimum pay and fitment factor to a committee for reconsideration. The NJCA will await communication in this regard from the government”.

It said that it will meet on 6 July again to decide on the proposed indefinite strike from July 11.

Source : tkbsen.in

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The Cabinet is likely to approve the 7th Pay Commission award in its entirety soon. Although the pay increases recommended by the commission will take effect from January 1, 2016, the Centre may choose to disburse the increased allowances only prospectively, official sources said.

If the revised allowances take effect only from, say, September this year, the savings to the exchequer would be to the tune of Rs 11,000 crore. Additionally, if the railway ministry decided to toe the Centre’s line, the national transporter will save around Rs 3,800 crore.

The salary revision, which will benefit about 50 lakh government employees and 58 lakh pensioners, is expected to boost consumption demand and help achieve higher economic growth in FY17.

Allowances are currently roughly half of the Centre’s salary bill; as per the pay panel’s award, the steepest increase — 63% — was in allowances, while the overall rise in pay, allowances and pensions recommended was 23.55%.

The Budget in February had provided `53,500 crore towards the pay panel-induced overall rise in pay, allowances and pension (PAP) and also to finance the one-rank-one-pension scheme for the armed forces. The commission, in its November 2015 report, had estimated the additional outgo in FY17 due to its award at `73,650 crore.

“A Committee of Secretaries (headed by the Cabinet secretary PK Sinha), has finalised its report on Pay Commission recommendations… We will soon make a draft Cabinet note based on the report,” finance secretary Ashok Lavasa said. Sources said the report will be considered by the Cabinet as early as Wednesday. The committee was set up in January.

While there is no official word on the exact provision made in budget for higher pay, Lavasa in a recent interview to FE said that its premature to say whether the provisions made in the budget are adequate or not to meet the pay panel requirements.

Source : http://www.financialexpress.com/

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Besides the government staff, economic analysts are keenly awaiting when and how the Centre will implement 7th Pay Commission award, which has implications for government finances (with estimated outgo of Rs 74,000 crore in FY16) as well as on inflation.

Also, with private investments yet to show decisive signs of picking up, the government has the difficult task of keeping the tempo in public spending, especially capital investments, at a time it is losing the benefits of low crude oil prices.

Finance secretary Ashok Lavasa speaks on these issues in an interview to FE’s Prasanta Sahu. Excerpts.

GDP growth in FY16 was put by the Central Statistics Office at 7.6%, with the growth in the last quarter coming in at 7.9%. Private consumption has been the growth driver. Despite the efforts by the government, private investors are yet to shed their diffidence. Among infrastructure sectors, highways, railways etc. have seen a turnaround but mainly because of government investment. How far is this model sustainable given the Centre’s (limited) fiscal capacity?

Many infrastructure projects, in which private sector has been involved, have started moving. In highway sector, for example, the hybrid annuity model has started attracting investors. As we go forward, we feel that the initiatives that have been taken by the government – to improve the ease of doing business and integrate various clearances – would give a push to private-sector investments. In infrastructure sectors, where the government plays a key role in awarding contracts etc, we are seeing positive results too. If all the factors are favourable, the GDP growth could be close to 8% this year.

The questions about GDP data refuse to wither away. Manufacturing GDP growth and the IIP (industrial production) data aren’t quite compatible, even if one considers the fact that apart from output, value addition is now being captured more efficiently.

The Q4 results of some of the major companies show that their EBITDA has increased. The variation between manufacturing growth (9.3% in FY16) and IIP (2.4%) was mainly due to the fact that some sectors did well while some did not.

How important are lower interest rates in reviving demand?

I think it’s a question of giving a boost to demand. Sometimes people may have more expectation than what RBI could do (in terms of lowering rates). The RBI has had to consider various factors and take a considered view. It is not possible to please all people all times. It is fair to expect that whatever lowering (of rates) has been done by RBI, finds an expression in the retail lending rates. I think the governor is right in saying full transmission has not happened of the central bank’s (cumulative 150 bps) rate cut since January 2015.

What will be the guiding framework of the “prospective planning” that will replace five-year Plan?

We could divide it into three parts: the period till which one can have some predictability on availability of resources, that will be, say, a three-year action plan. Beyond this, there will be medium-term (seven-year) Plan. Besides, there can be a prospective plan for theb period till 2030. In the prospective plan, what you already have is sustainable development goals, which are part of the international commitments. Niti Aayog will look at integration of issues and prospective planning while department of expenditure will make the fund allocations for various programmes.

Will substantial additional provision be needed to meet the Pay Panel-related outgo in FY17?

It will be too early and premature to say whether budgetary provision is not adequate or not. No one knows to what extent the government will accept the Pay Commission’s report. But, there is a provision in the budget to take care of the impact of the pay commission award (According to sources, FY17 budget has provision of about Rs 54,000 crore for honouring the pay panel’s award, but Lavasa refused to comment on this ).

Will Niti Aayog’s reported suggestions on strategic disinvestments in a clutch of PSUs including Air India be taken forward this year?

We haven’t so far received the recommendations you are referring to. We have to explore all forms of divestment and strategic sale is of course one of them. The Department of Investment and Public Asset Management will be looking at all possibilities and deciding on which unit to be put on privatisation or disinvestment or strategic sale mode.

Is there any move to monetise surplus land with defence, railways and ports bodies?

This is not to be done as a central government policy. The railways have been trying to monetise land. Certainly, this is one source of revenue, but it may be not a very significant source. Whenever an entity decides to take up any piece of land for monetisation, it has to consider all the legal issues, physical condition, its own plans of utilising and ultimately, if there is a market for that (in case of sale/leasing out).

Source: FE

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A salary hike is likely proposed by the Empowered Committee of Secretaries, which has been constituted to look into the recommendations of the 7th Pay Commission for cabinet nod, will not fuel inflation, says Finance Ministry top officials.

“The implementation of these recommendations will not affect inflation. The recommended pay scale has been hiked in line with the increasing size of the budget of government of India,” they told our reporter.

The 13-member body of Empowered Committee of Secretaries, headed by the Cabinet Secretary P K Sinha, who is processing the recommendations of the 7th Pay Commission decided to hand over soon its possible proposal to the the Finance Minister Arun Jaitley for cabinet nod. It is likely to propose a substantial pay hike which could be up to 30 per cent or even more, said officials.

the 7th Pay Commission had recommended a minimum monthly basic salary of Rs. 18,000 and maximum Rs. 2,50,000. A 30 percent increase would translate into minimum basic salary of Rs. 23,400 and maximum at Rs. 3,25,000, respectively.

However, The Empowered Committee is likely to purpose Rs 2,70,000 as highest basic pay and Rs 24,000 as the lowest, they also likely to recommend for doubling of existing rates of allowances and advances, the officials added.

The government in its annual budget has provisioned Rs 70,000 crore to meet the demand for implementation of 7th Pay Commission for central government employees which will take effect from January 1, 2016, while the allowances would be paid from the date of implementation.

“Central government employees could get the revised pay and allowances from their August salaries and arrears are to be paid ahead of festive season of Dussehra in one installment,” the officials confirmed.

The Economists fear that the 30 percent salary hike would fuel inflation as the pay commission recommendations will also have a bearing on the salaries of the state government staff.

So quite understandably, the government employees are happy as pay increase will enable them to increase their consumption and meet some of their unmet demand.

At the same time, there is a widespread fear that the pay commission recommendations are likely to increase inflation which will reduce the purchasing power of money.

RBI Governor Raghuram Rajan earlier said the 7th Pay Commission recommendations will not upset fiscal maths as additional expenditures will be offset by either surplus revenues or expenditure cuts.

Finance Minister Arun Jaitley earlier also said hat he was not worried about fiscal deficit on implementation of the pay commission’s recommendations. He said that the Pay commission award increase government expenses by Rs 1.02 lakh crore but that would not be a problem.

“The government has sufficient resources. Implementing the 7th Pay commission award will not affect inflation.” the official told our reporter.

The officials said that apart from hiking pay, the government is also likely to propose some administrative reforms, to be implemented in phases.

TST

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The Empowered Committee of Secretaries, who is processing the recommendations of the 7th Pay Commission met Saturday to discuss the issue of pay hike of central government employees and pensioners.

Sources told that Empowered Committee agreed to implement to hike pay to 48 lakh of central government employees and and 52 lakh pensioners from August 1, However, the source declined to reveal details of the meeting.

The final decision on the matter has been taken in the meeting of the 7th Pay Commission review committe chaired by Cabinet Secretary P K Sinha in New Delhi on Saturday.

The meeting’s agenda also included adding final touches to the recommendations before they are handed to the Finance Minister Arun Jaitley.

7th Pay Commission award comes into effect with retrospective effect from January 1, 2016, salary packages of central government employees and pensioners will be impacted.

The Empowered Committee of Secretaries proposed to credit the arrears along with the revised pay.

The Secretaries’ group has recommended proposed a minimum salary at Rs 21,000 and the highest salary at Rs 2,70,000 for hiking salary around 30 per cent also recommended for doubling of existing rates of allowances and advances.

The 7th Pay Commission by headed Justice A K Mathur had recommended the minimum salary for central government employees at Rs 18,000 and maximum salary at Rs 2,50,000.

TST

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Central government employees will be richer in the coming months with the government planning to spend Rs 1.02 lakh crore on its employees.

The Empowered Committee of Secretaries on the 7th Pay Commission will make revision in the pay scales of the central government employees.

Although 48 lakh strong workforce and 52 lakh pensioner of central government come under the purview of 7th pay commission but the government doesn’t hesitate to give pay in hike to its employees.

The Empowered Committee of Secretaries will be making revision in the pay scale on June 11 on the inputs Implementation cell.

Implementation cell hold a series of discussions and meetings with the employees’ unions, which brought a motion to compel the Empowered Committee of Secretaries to decide to propose a minimum salary at Rs 21,000 and the highest salary at Rs 2,70,000.

Each of the central government employees- from low paid employees to high ranking official- will get a salary hike of around 25 per cent to 30 per cent from January 2016, a Finance Ministry official said on Friday asked not to be named because he was not authorized to release the information.

The 7th Pay Commission’s recommendations that would put an additional burden of Rs 1.02 lakh crore on the exchequer. “But government is ready to spend that much on its employees,” he added.

The Central Government Employees’ Confederation also pressed that 7th Pay Commission recommendations should be implemented immediately with necessary amendments.

Accordingly, the Empowered Committee of Secretaries on the 7th Pay Commission is expected to submit its report soon to Finance Minister Arun Jaitley for cabinet nod.

The 7th Pay Commission by headed Justice A K Mathur had recommended the minimum salary for central government employees at Rs 18,000 and maximum salary at Rs 2,50,000.

The pay commission submitted its report to Finance Minister Arun Jaitley on November 19 last year.

After that, the government formed a secretary-level Empowered Committee headed by Cabinet Secretary P K Sinha to review the pay panel’s recommendations and an Implementation Cell has also been created in the Finance Ministry which works as the Secretariat of the Empowered Committee of Secretaries.

The government will make the announcement of 7th Pay Commission award soon after reviewing the Empowered Committee of Secretaries’ report on the remuneration of central government employees.

TST

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Implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, government said today.

The implementation of recommendations of the 7th Pay Commission, however, would be after approval of the Cabinet on completion of screening of suggestions by a high-level panel of secretaries, the Rajya Sabha was informed today.

The implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore (or 0.7 per cent of GDP at current market prices) on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016.

In a written reply, Minister of State for Finance Jayant Sinha also said that the announcement of Dearness Allowance has no impact on the recommendations of the Pay Commission.

Giving details of financial implications of the recommendations, Sinha said the burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Without the Pay Commission recommendations, the outgo would have been Rs 2.44 lakh crore.

The outgo towards HRA will increase by Rs 17,200 crore to Rs 29,600 crore. The outgo on pension front will be Rs 1.76 lakh crore (increase of Rs 33,700 crore) and on other allowance will be Rs 36,400 crore (up Rs 12,100 crore).

The Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission was set up in January.

The recommendations of the Pay Commission will have bearing on the remuneration of 48 lakh central government employees and 52 lakh pensioners.

PTT

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