Dearness Allowance announcement before Diwali ?

Source : babusnews.com

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The Government has decided to Constitute a committee to examine the 7th CPC Allowances. We cannot assume anything about the rates of Allowances until the Committee submit its report on Allowances.

Mainly the HRA and TA are one of the Main component of Salary.

So the government employees are disheartened by the Government decision to take time to decide on these allowances.

Already it has been reported that 7th CPC will be implemented in a staggered manner.

Now it is clear that, if the 7th Pay Commission come into force with immediate effect after publication of Gazette Notification, the HRA and TA will be paid at Sixth CPC rates in pre revised Scale. It means the amount of HRA and TA paid in Sixth CPC will continue for next few months. The Central staffs will be paid all the allowances in pre revised Scale up to the Committee decides on Allowances. It will take more than four months for Government to decide on HRA and TA.

So actual increase on account of 7th pay commission implementation will be 14.29 percent over Sixth CPC Basic + 125% DA. The increase in Basic Pay only will be reflecting in 7th CPC salary .

Nobody can say that 7th CPC gives 23.45% increase in Pay and Allowance for CG employees at least for some time.

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Speculations are rife as Centre to take decision on 7th Pay Commision report implementation as around 47 lakh Central Government employees working in various sectors await their salary hike, which will have implications for government finances and inflation.

At a time when there are no conclusive increase in the private sector spending yet and the government also losing the benefits of low oil prices, it is facing a tough challenge in keeping up with the spending in public sector.

Reacting to a query, Finance secretary Ashok Lavasa said that a certain amount has been allocated to manage the impact of the pay commission award. But to speculate whether the amount is adequate enough, would be too early and premature.

Sources say, for this fiscal year the provision for hounouring the pay panel’s award is about Rs 54,000 crore whereas the outgo is estimated to be Rs 74,000 crore. Lavasa refused to comment on that saying no one knows as to what extent the government will accept the 7th Pay Commisions report.

Source : Financial Express

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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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7th Pay Commission Latest News – Unilateral decision by Government will not be accepted – Staff Side JCM writes to Govt for conducting negotiation with Staff Side Associations before taking a decision on 7th Pay Commission recommendations

Though the central government employees are ardently waiting for the implementation of the Seventh Pay Commission, reports suggest that it will not be done before the results for the Assembly elections are announced. If reports are to be believed then the proposal of minimum pay of 24,000 will be taken into consideration and the reasonable expectations of central government employees will be met while announcing the salary hikes in accordance with the 7th pay commission.

According to a Zee news report, “Other than the pressure of trade unions, the results of the Assembly election in five states, West Bengal, Assam, Tamil Nadu, Kerala, Pondicherry, are likely to have an influence on the final pay out.

The notification towards implementation of the seventh pay commission will be announced only after the result of the elections. If the mandate goes totally in favour of the Opposition, the government will be under greater pressure to keep the dissatisfaction related to salalry hike in check.”

‘No unilateral decision on salary hikes under 7th Pay Commission acceptable’ The central government employees lead by the National Council (Staff Side) Joint Consultative Machinery have said that they will not accept unilateral decision on salary hikes under the seventh Pay Commission and would like to have more say in the way their monthly salaries and allowances are shaped up by the Empowered Committee of Secretaries. “Neither did the Government side made any commitment on any demands, nor did they indicate in the minutes that further discussion will be held with the staff side to arrive at a negotiated settlement on each demands.

It seems that the Modi Government is moving ahead to issue unilateral orders taking the staff side for a ride”, M Krishnan, Secretary General of the central government employees confederation was quoted as saying in the Zee report. “The staff side on the other hand has taken a position that if unilateral orders are issued, without taking the staff side into confidence, the NJCA shall go ahead with the indefinite strike from 11th July 2016 as already informed to the government”, Krishnan further added in the report.

An empowered committee of Secretaries was formed under the Cabinet Secretary to process the recommendations of the pay panel.

This committee also invited the Joint Consultative Machinery which is the group representing the Staff side (central employees union) to understand their view point. The central employees union has clearly said that they will not accept any unilateral decision on the issue and needs a bilateral negotiation on the matter.

Source: One India

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New Delhi: Finance Minister Arun Jaitley today said he was not worried about fiscal deficit and government would be able to meet its target despite additional outgo towards the implementation of the Seventh Pay Commission.

He admitted however that the impact of implementing the pay commission’s recommendations, which will result in an additional annual burden of Rs 1.02 lakh crore on exchequer, would last for two to three years.

“I am not particularly worried about the fiscal deficit target,” he said while replying to questions on the impact of the recommendations on public finances at the HT Leadership summit.

He further said that besides achieving the target, the government has also been able to improve the quality of fiscal deficit. The government proposes to bring down the fiscal deficit to 3.9 per cent of GDP in 2015-16, 3.5 per cent in 2016-17 and 3 per cent by 2017-18.

“If you achieve a fiscal deficit by either cutting down expenditure or withholding tax returns, then you may strictly have statistical figure, but the quality of the fiscal deficit will always be suspected…we have concentrated on the quality of the fiscal deficit and we will probably be able to maintain it,” he added.

As regards the impact of the Pay Commission award to central government employees, Jaitley said the normal rule is that the expenditure on salary and pension should be 2.5 per cent of the Gross Domestic Product.

The ratio will deteriorate in the initial years with the implementation, he said.

However, “…as the base of the GDP increases, by the third or the fourth year, the spikes come down and (thereafter) you reasonably reach that 2.5 per cent figure back… These pressures will be for the next 2-3 years,” the minister added.

PTI

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Are there any chances of getting any concrete information about the 7th Pay Commission recommendations which will be submitted this evening?

Crores of central and state government employees and pensioners all over the country have been eagerly waiting for months to get some information about the 7th Pay Commission. Will their desire get fulfilled today?

Or, will the submitting of the report by Justice A.K.Mathur, who is currently being pursued by an army of reporters, be a mere formality?

Only time will tell.

Mediapersons will have loads of pointed questions, that’s for sure. But, the chairman or a member of the Pay Commission will have to reply. If that happens, there are chances of getting some authentic information today.

Meanwhile, most of the English dailies have claimed that only a 15 percent salary hike is possible. But, their explanation is incomprehensible.

It has to be mentioned here that none of the leading employees associations, like the NC JCM and the Confederation, has said anything. The representatives of these unions say that they are refraining from making comments on assumptions and guessworks.

Source: http://7thpaycommissionupdates.in/

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