GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS

RAJYA SABHA
UNSTARRED QUESTION NO.2704
ANSWERED ON 24.03.2017

IMPLICATIONS OF IMPLEMENTATION OF SEVENTH PAY COMMISSION

2704.SHRI MOHD. ALI KHAN:

Will the Minister of RAILWAYS be pleased to state:

(a) whether it is a fact that implementation of the Seventh Pay Commission recommendations has serious financial implications on Indian Railways, if so, the estimated additional financial implication over staff and pensioners; and

(b) whether Railways are planning to take up rationalisation of manpower in view of the financial implications, if so, the details thereof?

ANSWER
MINISTER OF STATE IN THE MINISTRY OF RAILWAYS
(SHRI RAJEN GOHAIN)

(a) The estimated additional financial impact of 7th Pay Commission on Railways is around 15,000 crore ( 8,000 crore for staff and  7,000 crore for pensions). The Railways would be able to absorb the 7th CPC impact in 2016-17 within its resources.

(b) Manpower Planning is a continuous process and involves review of staff through work-studies, change in nature of work etc. No separate rationalization is proposed consequent upon the 7th Pay Commission.

Source: Rajya sabha

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The 7th Central Pay Commission (CPC) recommended HRA of 24% of the basic pay for those cities with population over 5 million.

New Delhi, Feb 18: The Union Government is all set to clear revised allowances for the central government staff, precisely after a year of the implementation of the 7th Pay Commission. As per reports, one year after the implementation of the new pay and pension scheme, as recommended by the 7th central pay commission, the central government employees might have something to rejoice about after the assembly elections in 5 states are over. Reportedly, the revised allowances are likely to be effective from April 1. (ALSO READ: Committee on Allowances likely to raise HRA to 30 per cent)

House rent allowances (HRA) accounts for about 60% of the total allowances bill, as The Financial Express stated and according to the revised allowance scheme, the employees, mostly in the metropolitan cities are expected to receive greater HRA than the 7th Pay Commission actually recommended. The 7th Central Pay Commission (CPC) recommended HRA of 24% of the basic pay for those cities with a population over 5 million. But the revised HRA which is being looked at by the Finance Secretary-led panel is 30%. Notably, in the 6th Pay Commission, the HRA was at 30% as well for the cities with more than 5 million people. A draft of the cabinet note for implementation of the revised allowance is expected to be circulated soon.

As per reports, the financial implication of these revised allowances will be in line with the Central Pay Commission’s estimate of around Rs. 29,300 crores, which shall also include the railways, in the first year. The panel led by the Finance secretary is also reviewing the CPC’s recommendation regarding allowances. The pay panel has also recommended scrapping of 52 benefits while merging 36 already existing benefits.

Notably, there has been only an additional allocation of Rs. 4,500 crore in the Budget for allowances and it has been assumed that the Railways will bear Rs 7,600 crore of expenditure. But as per sources stated by FE, still, the additional allocation which will be required from the General Budget could be somewhere around Rs. 17,000 crores.

The Government has, reportedly, enough leg space, thanks to the demonetisation move and the extra taxes the people had to pay under the income disclosure schemes. But according to experts, the Budget assumptions were based on optimistic estimates of nominal GDP growth for financial year 17 (FY17) and thus for FY18.

Many have been complaining about the delay in the decision of allowances to the government employees, with some claiming the formation of the panel led by the Finance Secretary as a delaying tactic itself. But this has helped to boost the spending of the government in various programmes by around Rs. 36,000 crores in FY17.

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New Delhi: The Delhi government has notified implementation of the Seventh Pay Commission recommendations, which provides 2.5 times hike in basic salaries and pensions of its employees and pensioners with effect from January 1.

The over one lakh employees of the city administration, will get the increased salaries from next month. The arrears will also be paid in one go next month, a Delhi government official said.

The hike in pensions and salaries will cost the exchequer around Rs 2,000 crore annually. The notification was issued after Lt Governor Najeeb Jung gave his approval for the same, the official said.

The move comes nearly one-and-a-half months after the Centre approved the recommendations of the pay panel.

“Arrears as accruing on account of revised pay consequent upon fixation of pay under CCS (RP) Rules with effect from January 1, 2016 shall be paid in cash in one installment along with the payment of salary for the month of August, 2016, after making necessary adjustment on account of GPF and NPS, as applicable, in view of the revised pay,” Deputy Secretary Manoj Kumar said in a written communication to head of all departments.

As per the the new scales of pay, the basic salary at entry-level is going up from Rs 7,000 per month to Rs 18,000, while at the highest level i.e. secretary, it would go up from Rs 90,000 to Rs 2.5 lakh. For class one officers,the starting salary will be Rs 56,100.

PTI

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President of the National Mazdoor Conference (NMC) Subash Shastri today expressed deep concern over the continued delay over non issuance of notification regarding the implementation of 7th Pay Commission recommendation till date.

In a memorandum sent to Prime Minister, Shastri has appealed him to immediately issue the said notification after review by empowered committee under expenditure secretary.

Shastri stressed upon removal of ambiguity as the issue is causing lot of hardships for salaried class and pensioners also.

“It is a cause of concern that delays in submitting its report by the committee is creating doubt in the minds of crores of employees both Centre/State Governments as the recommendations of 7th Pay Commission were to be implemented with effect from January 1, 2016, he added.

Shastri urged Modi to liberally finance the States Governments as well so that the 7th Pay Commission recommendations are implemented simultaneously by the Centre as well as States.

He urged PM to personally intervene and secure the interests of the salaried class. Shastri also appealed to raise Income Tax sealing to Rs 5 lac as the salaried class is finding it difficult to cope with increased inflation and rising costs.

Shastri reminded that NDA Government at Centre was voted to power by the urban voters of which the salaried class of Government sector formed the bulk force.

He stressed upon the need to issue notification regarding the amount of wages of daily rated workers at National level to be raised to Rs 10,000 per month as has already been principally agreed to by the Centre Government.

Source: Daily Excelsior

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