The seventh pay commission headed by justice (retired) AK Mathur, presented its 900-page report to finance minister Arun Jaitley. Commission has recommended an average 23.55% increase in salary of central government employees, allowances and pension.
This move will benefit 4.8 million staffers and 5.5 million pensioners. A minimum pay of Rs 18,000 per month and a maximum of Rs 2.5 lakh has been recommended by the commission.
The hike will be effective from January 1, 2016.
[The general meaning of Gratuity is – “a favor or gift, usually in the form of money, given in return for service.’ In employment terms, Gratuity Benefit amount is similar to a bonus, meaning that it is a portion of your salary provided to you, by your employer, for the services rendered on the company’s behalf. Gratuity is a reward for your long and meritorious service.”]
[The Dearness Allowance (DA) is– “a cost of living adjustment allowance paid to Government employees, Public sector employees (PSU)and pensioners in Bangladesh and India. Dearness Allowance is calculated as a percentage of an Indian citizen’s basic salary to mitigate the impact of inflation on people.”]
Since the government’s overall expenditure will increase, its fiscal deficit – the difference between what it earns and spends – will also widen by 0.65 percentage points and likely make an impact on the deficit-reduction target of 3.5% for the next financial year (2016-17).
The previous United Progressive Alliance (UPA) government appointed the Seventh Pay Commission on February 28, 2014. The central government constitutes the pay commission every 10 years to revise the pay scales of its employees and these are usually adopted by states after some modifications.