New Delhi: The Union government has dropped higher allowances proposal under the 7th Pay Commission from its today’s cabinet meeting agenda at the last minute, the Finance Ministry officials involved with the process of higher allowances told The Sen Times on condition of anonymity.

The officials said recommendation of the Empowered Committee of Secretaries (E-CoS) headed by Cabinet Secretary P K Sinha on higher allowances, was due to come before the Union cabinet at its meeting today for formal approval.

However, the item was dropped from the agenda at the last minute, as Finance Minister Arun Jaitley is on an official visit to South Korea, they added.

However, they said that the Cabinet may decide on 7th pay commission allowances this month.

In June 2016, the Cabinet approved 14% pay and pension hike for central government employees and pensioners under the 7th Pay Commission recommendations with effect from January 1, 2016.

The decision on higher allowances was postponed by the Cabinet on that time because the 7th Pay Commission wanted abolition of 52 allowances and subsuming of another 36 allowances into larger existing ones out of total 196 allowances.

Employee unions were opposed it, which government complied with formation of the Committee on Allowances headed by Finance Secretary Ashok Lavasa in June 2016 to review the allowances.

The Committee on Allowances submitted its report to Finance Minister Arun Jaitley on April 27.

The report was then taken up by the Department of Expenditure for examination, following which it was passed on to the Empowered Committee of Secretaries set up to screen the 7th Pay Commission recommendations and to firm up the proposal for approval of the Cabinet.

The Empowered Committee of Secretaries was in the process of preparing the Cabinet note on higher allowances, which was completed on June 1.

The central government employees are now getting no new allowances (except Dearness Allowance) with their new pay structure till the cabinet nod.

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New Delhi: The Empowered Committee of Secretaries (E-CoS) will finally take up higher allowance report on June 1, said Shiv Gopal Mishra, secretary of the National Joint Council of Action (NJCA), which is a centralised union of several central government employees unions, who met the Cabinet Secretary P K Sinha.

The ‘Committee on Allowances’, which examined the 7th pay commission’s recommendations on allowances, submitted its report to the finance minister Arun Jaitley on April 27.

The committee on allowances has suggested some modifications in some allowances that are applicable universally to all employees as well as certain other allowances which apply to specific employee categories, the finance ministry said in a statement.

However, the Committee’s report on allowances under the 7th Pay Commission hasn’t made public.

The committee on allowances report is being currently examined by the Empowered Committee of Secretaries (E-CoS) headed by Cabinet Secretary P K Sinha set up to screen the 7th pay commission recommendations and to firm up the proposal for approval of the Cabinet.

In June 2016, the government approved 14% pay and pension hike for central government employees and pensioners under the 7th Pay Commission recommendations.

The decision on allowances was postponed at that time because the 7th Pay Commission had recommended abolition of 52 allowances and subsuming of another 36 allowances into larger existing ones out of total 196 allowances. Employee unions were opposed.

Accordingly, the government implemented the recommendation of the 7th Pay Commission from January 1, 2016 in respect of basic pay and dearness allowances, other allowances continued to be paid at old rates.

So, the finance minister Jaitley referred allowances to the committee on allowances headed by Finance Secretary Ashok Lavasa in June last year.

The 7th Pay Commission also recommended slashing the House Rent Allowance (HRA) from 30, 20 and 10 per cent to 24, 16 and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The National Joint Council of Action (NJCA) demanded the government to implement higher allowances without further delay with effect from January 1, 2016.

The NJCA also demanded HRA at the rate of 30%, 20% and 10% instead of 24, 16 and 8%.

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New Delhi: The report on allowances will be placed before the empowered committee of secretaries in the next week for screening, a finance ministry official told on Monday.

The empowered committee of secretaries to take up all issues of allowances, including house rent allowance (HRA), which has been submitted by Committee on Allowances headed by Finance Secretary Ashok Lavasa on its report under the recommendations of the 7th Pay Commission.

The Cabinet approved the setting up of Empowered Committee of Secretaries on January 13, 2016 to process the recommendations of the 7th Pay Commission in an overall perspective. Accordingly, the report of allowances will be screened by that Empowered Committee of Secretaries, the official said.

The finance ministry has set up a 13-member Empowered Committee of Secretaries (E-CoS) headed by Cabinet Secretary P K Sinha on January 27, 2016 on cabinet nod for processing the report of the 7th Pay Commission, which has bearing on remuneration of 47 lakh central government employees and 52 lakh pensioners.

The other members in the panel include secretaries from the Home Affairs and Defence ministry and secretaries of department of personnel and training, pension and PW, revenue, expenditure, posts, health, and science and technology. Chairman of Railway Board, Deputy CAG and Secretary (Security) in the Cabinet Secretariat are also on the panel.

“It will look at all the issues of allowances, including HRA and it will function as a Screening Committee to process the Committee on Allowances report with regard to all relevant factors,” the official said.

“The report on allowances is now being examined in the Department of Expenditure. It will be completed shortly, we expect, the finance minister Arun Jaitley next week will hand over it to the Empowered Committee of Secretaries (E-CoS) to examine it and after consideration by the empowered committee of secretaries, the higher allowances shall be placed before the Cabinet for approval.,” the official added.

The employees now get all allowances except dearness allowance at the old rates until the cabinet approval of higher allowances.

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An employee union leader said the Empowered Committee of Secretaries (E-CoS) may take 2-3 weeks to screen the allowance committee report on 7th pay commission recommendations. The Empowered Committee of Secretaries will then firm up the proposal for approval of the Cabinet.

The employee union leader earlier this week met top government officials where he was told about the tentative time to be taken by the Empowered Committee of Secretaries on screening the allowance committee report on 7th pay commission recommendations. The Ashok Lavasa committee on allowances, which examined the 7th pay commission’s recommendations on allowances, submitted its report to the finance minister on April 27.

The allowance committee has suggested some modifications in some allowances that are applicable universally to all employees as well as certain other allowances which apply to specific employee categories, the finance ministry said in a statement.

The allowance committee report is being currently examined by the Department of Expenditure. Once that is done, it will be placed before the Empowered Committee of Secretaries (E-CoS) set up to screen the 7th pay commission recommendations and to firm up the proposal for approval of the Cabinet. The employee union official said that the allowance report will be soon taken up by the Empowered Committee of Secretaries.

The 7th pay commission had recommended that house rent allowance or HRA be paid at the rate of 24%, 16% and 8% of the new basic pay, depending on the type of city.

The 7th pay commission had also recommended that the rate of HRA be revised to 27% 18% and 9% when DA crosses 50%, and further revised to 30 per cent, 20% and 10% when DA crosses 100 per cent. With regard to allowances, employee unions have demanded HRA at the rate of 3%, 20% and 10%.

The 7th pay commission had recommended that of a total of 196 allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.

The Cabinet on Wednesday approved modification in recommendations of the 7th pay commission relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on recommendations of a high-level panel. It is said that the decision will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.

Source: NDTV

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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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