7th Pay Commission: After Dearness Allowance Hike, Raise in Minimum Pay, Fitment Factor Unlikely; Here’s Why

New Delhi, Mar 8: An additional two per cent hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) to pensioners was announced in accordance with the accepted formula, which is based on the recommendations of the 7th Pay Commission or 7th CPC. After the hike in DA and DR, the government may not raise minimum pay and fitment factor beyond the recommendations of the 7th Pay Commission.

The additional two per cent hike in DA and DR under the 7th Pay Commission would bring a financial burden of Rs 6,077.72 crore per annum, and Rs 7,090.68 crore in the financial year 2018-19 (for a period of 14 months from January 2018, to February 2019) on the exchequer. A hike in minimum pay and fitment factor beyond the recommendations of the 7th Pay Commission would further stress the exchequer. The government would not want to take this risk especially ahead of 2019 Lok Sabha elections.

Speaking to regarding arrears on higher allowances under the 7th Pay Commission, National Joint Council of Action (NJCA) convenor Shiv Gopal Mishra had said, “Government had allocated Rs 1 lakh, two thousand crores for implementation of 7th Pay Commission. That amount has not been completely spent. Even if they will provide us arrears on allowances from January 1, 2016, I believe the cost would not exceed beyond the amount allocated.”

The 7th Pay Commission, which was poised to cost the Centre Rs 1.02 lakh crore, would cast a heavy toll on the exchequer, claim critics. India spends a whopping Rs 10.18 trillion on salaries of the central and state government employees, including the amount spent on implementation of the 7th Pay Commission’s recommendations. This is a staggering 8.15 per cent of the country’s GDP.

The government had approved the recommendations of the 7th Pay Commission in June 2016 raising minimum pay from Rs 7,000 to Rs 18,000 month with fitment factor 2.57 times. Since then, the central government employees have been asking to raise minimum pay to Rs 26,000 and fitment factor 3.68 times. There had been reports that the government was planning to hike minimum pay to Rs 21,000 with fitment factor 3.00 times. However, there is no official confirmation on this yet.

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