Government is mulling an increase in the hike in pay to central government employees beyond 7th pay commission recommendations, a top Finance Ministry official, who did not wish to be named told The Sen Times here today.

Government will come out with a decision in this regard soon after consulting finance experts and weighing its pros and cons, he said.

Government is now considering to make only pay hike for its employees.

“The financial advisers of the government believe it could be tough to give arrears of the hike in pay as the government has been worried after the April-June GDP growth slipped to a three-year low of 5.7 percent but government believes it will bounce back in the second quarter. Among others, it observed that this year’s fiscal math is already stressed as public spending was front-loaded to offset slower private sector participation and cushion the impact of GST roll-out”, he revealed.

“All round development is possible only hike in basic pay with fitment factor 3.00 and minimum pay will be raised to Rs 21,000,” he said.

The 7th Pay Commission, led by Justice A K Mathur, earlier proposed minimum basic pay from Rs 7,000 to Rs 18,000 per month while the maximum basic pay from Rs 80,000 to Rs 2.5 lakh, which have been paid with arrears, effective from January 1, 2016.

The central government employees unions had expressed their dissatisfaction over the inadequate hike in basic pay in accordance to the pay panel recommendations.

They are demanding for hiking minimum pay Rs 18,000 to Rs 26,000 and the and asked to raising fitment factor 3.68 times from 2.57 times.

Stating that National Anomaly Committee (NAC) headed by Secretary, Department of Personnel and Training (DoPT) has been formed under pressure in September, 2016 to look into pay anomalies arising out of the implementation of the 7th Pay Commission’s recommendations, the official said, “The NAC meeting is likely to be held in October to confirm to hike the basic pay with fitment factor 3.00.”

Pointing out that the Finance Minister Arun Jaitley had promised to hike minimum pay after discussions with all stakeholders, he said, “government has made active efforts to fulfill the same”.

The proposal of hike in pay is likely to be sent to the Finance Minister Arun Jaitley from NAC, after which it will be placed before the cabinet. Official believes it will come into effect within January’ 2018.

TST

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Demand implementation of pay hike recommendations

Many college and university teachers across States are planning to protest the non-implementation of the recommendations of the University Grants Commission’s (UGC) committee on the Seventh Pay Committee to hike salaries of teaching staff in line with the hikes Central government employees received last year.

At its national executive meet here on Sunday, the All-India Federation of University and College Teachers’ Organisations (AIFUCTO) – which has a presence in about 400 State universities across India – decided to engage in non-cooperation with university and college administrations across India from November 13 to 18.

At a conference to be held in Pune from December 18 to 20, delegates may decide to go on indefinite strike.

The pay committee’s recommendations came sometime back and most sticking points have been resolved, according to officials of the Ministry of Human Resource Development (MHRD). However, they have not been sent to the Cabinet for its nod for months.

Shun work

“Since the festival season is in October, we will protest from November. From November 13 to 18, teachers will shun all administrative work. They are often appointed as proctors, rectors or controllers of examinations. We are giving a call to them to not perform their administrative duties for five days. Also, on November 15, there will be a sit-in dharna. They will not take classes on this day,” Arun Kumar, secretary general of AIFUCTO, told The Hindu after the meet.

On November 30, the organisation will hold a one-day protest at the university level across India, in which teachers will hand over charters of their demands to Vice Chancellors of universities.

Read at: The Hindu

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GOVERNMENT OF INDIA
MINISTRY OF HEALTH AND FAMILY WELFARE
RAJYA SABHA

UNSTARRED QUESTION NO-4434
ANSWERED ON-11.04.2017

Strike call by nurses federation over pay hike

4434 . Shri Dilipbhai Pandya
Will the Minister of HEALTH AND FAMILY WELFARE be pleased to state:

(a) whether it is a fact that All India Nursing Federation has been demanding for revision of their pay scales and a hike in allowances, if so, the details thereof;

(b) whether Government has taken any decision on their demands; and

(c) the steps being taken by Government to appease the unions of nurses and persuade them to call off their strike?

ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF HEALTH AND  FAMILY WELFARE
(SHRI FAGGAN SINGH KULASTE)
(a) & (b): Yes. Like other Federations/Union, All India Nursing Federation (AIGNF) is demanding better pay and allowances to the Nursing Personnel. Their demands on various allowances such as Nursing allowance, Uniform & Washing allowance, Special Area Allowance etc. payable to Nurses and inclusion in the risk matrix as allowed by 7th CPC to various categories of Government servants has been referred to the Committee on Allowances comprising Finance Secretary & Secretary( Expenditure) as Chairman and Secretaries of Home Affairs, Defence, Health & Family Welfare, Personnel & Training, Posts and Chairman, Railway Board as Members.

(c): Consultations/persuasion always made with the representatives of the Union/Federation to avoid strike.

Source: RAJYA SABHA

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New Delhi: Finance Minister Arun Jaitley told lawmakers on Friday that he would need more money in the current fiscal year to cover the cost of 7th Pay Commission Pay hike for 10 million central government employees and pensioners.

The government will require “some enhancement” for spending on salaries and pensions in 2016-17 to absorb the off-cycle pay hikes announced in June on the recommendation of the 7th Pay Commission.

The government faces a challenge to achieve its fiscal deficit target of 3.5 percent of GDP in the current fiscal year, but is “quite optimistic” of fully achieving the target of 3 percent in 2017/18, the finance ministry said in the Medium-Term Expenditure report tabled in parliament’s lower house.

Rating agencies such as Moody’s have said that the increase in wages would boost consumer demand, leading to inflationary pressures and making it difficult for the next governor of the Reserve Bank of India to achieve its inflation target.

Prime Minister Narendra Modi’s government has just confirmed a central inflation target of 4 percent, plus or minus 2 percentage points, that was agreed with departing governor Raghuram Rajan for the next five years.

Total federal spending on salaries and pensions is estimated to rise about 10 percent in the next fiscal year to 2.58 trillion rupees ($38.6 billion) compared with budget estimates for the current fiscal year.

Reuters

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New Delhi: Government has decided to pay its employees arrears arising from implementation of the 7th Pay Commission recommendations in one go in August salaries.

The government has already notified the 2.57-time hike in basic salary of one crore central government employees and pensioners as per the 7th Pay Commission recommendations. The pay hike has been made effective from January 1, 2016.

In an instruction, the Finance Ministry also said that the revised pay structure effective from January 1, 2016, would include the Dearness Allowance of 125 per cent provided in the pre-revised pay structure. The rate of the first installment of DA under revised pay will be announced later.

“The arrears as accruing on account of revised pay consequent upon fixation of pay under CCS (RP) Rules, 2016 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,” said the Finance ministry Office Memorandum
No.1-5/2016-IC today.

In order to expedite disbursal of arrears, the instructions said the “arrear claims may be paid without pre-check of the fixation of pay in the revised scales of pay.”

However, it added, that the facilities to disburse arrears without pre-check of fixation of pay will not be available for those public servants who have retired, resigned or dismissed after the date of implementation of the Pay Commission recommendations.

The minimum pay in central government with effect from January 1, 2016 will now be Rs 18,000 per month, up form Rs 7,000 per month. At the highest level of Cabinet Secretary, the salary would go up from Rs 90,000 a month to Rs 2.5 lakh.

There shall be two dates for grant of increment – January 1 and July 1 every year – instead of the existing July 1 only.

The instruction further said that Income Tax would be deducted before payment of arrears.
PTI

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It is not just Central government employees eagerly anticipating implementation of the 7th pay commission and take home higher monthly pay package.

Your next-door real estate agent, car dealer and consumer durables seller are also seen gaining from the pay commission hike. According to reports, almost 3.4 crore individuals (employees and pensioners) will witness increase in their incomes, resulting in a multiplier effect on a couple of professions.

Real estate agent: Realty sector is expected to eventually succeed in shaking off the sluggish demand and witness spurt in the sale of houses in tier 1 and tier 2 cities as more than 80 percent of Central government employees lives in these cities

As a result of the foreseen demand, the Reserve Bank of India expects sharp, quick and continuous spurt in the housing index.

Car dealer: With implementation of the 7th CPC, your next door car or two wheeler dealer may rejoice too. The industry expects double digit increase in automobile sales especially two-wheeler, the mini and the compact hatch back segment.

Consumer durables seller: The increase in disposable income will no doubt boost the disposable income leading to increased demand for consumer durables goods like refrigerators, TV etc

Banker: Of course, peaking demand for automobiles, real estate and consumer durable will create demand for consumer loans. The consumer loans section of banks and NBFCs will vie to get the larger share of the indirect gain from the 7th CPC salary hike.

The scenario of crores of potential customers and falling interest rate will announce a win win situation for the banks and consumers both.

Via:  Zee News

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While this will result in less cash in the hands of higher-income employees, as a sweetener they will get income tax rebate on the amount invested. Those wanting to invest more than 50% to save tax will be allowed to do so. The Bank Recapitalisation Scheme, as this proposal is being called, will be voluntary for employees with lower salaries (those in the Rs 5,200-20,200 bracket) and pensioners.

A finance ministry official confirmed that preliminary discussions around this proposal were held at a meeting on A finance ministry official confirmed that preliminary discussions around this proposal were held at a meeting on Thursday, but no decision on its implementation was taken. “The issue was discussed. We are looking at all options,” he said.

“The proposal entails that through a provision under Income Tax Act, tax rebate should be offered to all employees receiving extra salary income through pay commission in the year 2016-17 and 2017-18, provided the money is invested in this Bank Recapitalisation Scheme,” added the official.

The government will have to additionally shell out Rs 40,000-50,000 crore annually on account of implementation of the seventh pay commission recommendations with effect from January 1, 2016. If this proposal is accepted, a portion of this money will be used to capitalise banks. According to finance ministry estimates, state-run banks will require Rs 1.8 lakh crore of additional capital in the next four financial years, of which Rs 70,000 crore will be provided by the government.

The government has budgeted Rs 25,000 crore for bank capitalisation in the current fiscal. While the government has said it has made adequate provision in the Budget to cover the extra spending on account of the pay commission recommendations, analysts reckon it is not adequate and full implementation of award will make it difficult to achieve the fiscal deficit target of 3.5% of GDP.

“Increase in government employee wages and pension expenditure on account of seventh pay commission recommendations is not fully provided for in the Budget,” Morgan Stanley had said in a report.

The proposal currently under consideration gives the government the leeway to meet both its pay commission and bank capitalisation commitments without putting the fiscal deficit target under threat. Bonds will provide the exchequer some wriggle room. The payment will become due when bonds mature, leaving the government with only the interest payment liability in the current fiscal.

The flip side is that the proposed scheme could annoy government employees expecting a greater take-home pay. Hence the scheme has a tax exemption lollipop.

A second government official said this amount will be used to recapitalise banks through a special bank capitalisation fund that will invest in perpetual non-redeemable preference shares issued by banks. Banks will pay 5.1% dividend that is also proposed to be exempted from the dividend distribution tax. The fund will in turn pay 5% interest to government employees, retaining 0.1% as administrative charge.

“This interest income will also be tax free for government employees,” he said, which will increase the effective yield. The government will eventually pay back the amount in four equal investments after 8, 9, 10 and 11years, spreading the fiscal burden of repayment over that period. It will guarantee payment of 5% interest and repayment of deposits irrespective of whether the banks pay the dividend or not, the official added.

Source: ET

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The net increase is likely to be in the range of 22 per cent after subsuming the current 119 per cent dearness allowance in the new basic and grade pay scale.

he Seventh Pay Commission is likely to recommend a net increase of 22 per cent over the current pay package of Central government employees with a 15 per cent raise in basic pay and up to 25 per cent jump in allowances.
“The net increase is likely to be in the range of 22 per cent after subsuming the current 119 per cent dearness allowance in the new basic and grade pay scale,” sources said. They said the net figure would provide the government the leeway to add another 5-7 per cent increase — as was done on the last two Pay Commission recommendations — to take the eventual raise to nearly 30 per cent.

The final figure, however, could be a tad below the 35 per cent hike employees got on implementation of the Sixth Pay Commission in 2008. “That time the situation was different. There was buoyancy in revenue collections. Now revenue receipts have become stagnant,” an official said. The recommendation, which will become effective after a Cabinet nod, will impact 50 lakh Central government employees and 54 lakh pensioners. Sources said they expected the entire approval process to take another four months, at least, with the likelihood of its implementation by June next year. However, since the hike in salaries is effective from January 2016, the arrears until June could be hived off as employees’ savings into the pension fund. “The Controller General of Accounts is already considering options for investment of Seventh Pay Commission arrears,” said an official.

Sources said the Pay Commission was expected to submit the recommendations on Thursday. The Commission was unlikely to tinker with the current retirement age of 60 years, they said. Pay Commissions are meant to review the salary structure of Central government employees and are set up every 10 years. The wage revisions of Central Government employees often trigger off similar demands in states.

Source: indianexpress.com

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Central government employees are being promised bigger pay and allowances in fiscal 2016-17 as Finance Minister Arun Jaitley said in the Parliament on February 27, “the Seventh Pay Commission impact may have to be absorbed in 2016-17.”

The Finance Ministry and the seventh central pay commission said nothing till date about this after the above announcement was made by Jaitley in his pre-budget speech for fiscal year 2015-16.

Central government employees have expressed frustration at this, and are worried that the the seventh central pay commission’s recommendations might not be come out in time.

After getting pay panel recommendations, the finance ministry will review the recommendation and present the report to the cabinet but the car bazar and real estate markets will attempt to prevent the implementation pay panel in time because of the delayed implementation of the Pay Commission will not only employees getting more arrears but could also drive the car sales and real estate markets.

Earlier, the central government employees got arrears for more than 30 months because of the delayed implementation of the Sixth Pay Commission in October 2008; it’s resulted in robust demand for car loans and house loans. The employees paid margin amount of loans from arrears and instalments from their new hike salaries.

According to Neelkanth Mishra of Credit Suisse, nearly one-third of India’s middle class is employed by the government and as the Seventh Central Pay Commission comes through, there will be an improvement in discretionary spending.

“In Tier 3, Tier 4 towns where government employees are 50-60 per cent of the middle class, it is very likely that real estate markets will take off again,” he said.

If implantation of Seventh Pay Commission occurs in time, then car bazar and real estate markets, will have become sufferers.

So, there are miles to go before the pay panel recommendations will be implemented for Central government employees and fund allocation in the next budget and other issues like pretext of Fourteenth Finance Commission recommendations are expected to prevent implementation of pay commission in time for giving benefit to the car bazar and real estate markets at the cost of central government employees.

However, Union Railways Minister and Home Secretary have sought reforms and a better salaries and allowances for top Railways officials and paramilitary forces respectively.

TST

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Belagavi (KTK): Karnataka government today announced pay hike in the range of Rs 5,000 to Rs 35,000 to its doctors, with an intention to attract more doctors for government service.

The monthly salary of MBBS or BDS qualified doctors with six years experience has been increased from Rs 54,989 to Rs 59,989, with six to 13 years experience from Rs 63,620 to Rs 68,620, with 13 to 20 years experience from Rs 73,569 to Rs 78,569 and with 20 years from Rs 87,649 to Rs 92,649.

The hike is effective today, Health Minister U TKhader said making the announcement in the Assembly.

Khader said for doctors with post graduate degree or diploma qualification with 6 years experience, the pay has been increased from Rs 59,780 to Rs 84,780, with 6-13 years experience from Rs 70,166 to Rs 95,166 and with 13-20 years experience from Rs 87,919 to Rs 1,12,919.

For Super Speciality Doctors with 6 years experience, the pay has been increased from Rs 62,980 to Rs 92,989, with 6-13 years from Rs 72,466 to Rs 1,02,466 and those with 13-20 years from Rs 84,319 to Rs 1,19,319.

BJP MLA C T Ravi questioned why pay has not been hiked for Ayurveda Doctors.

“Their salary also should be increased, if not it will lead to discrimination. We will have to support Ayurveda, whole world is turning towards Ayurveda,” he said.

Responding to this, Khader said, “I will look into it.
PTI

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