Friday 24 July 2015

7th Pay Commission Recommendations has begun to emerge!

“It doesn’t come as a surprise that even bits and morsels of information about the recommendations, which is being eagerly expected by nearly 50 lakh employees and pensioners, make headlines.”
The recommendations of the 7th Pay Commission have slowly started to make their way to the media in the form of unconfirmed news. The information that was being extensively discussed by all for more than a week now has finally made it to the websites yesterday.

It has now been confirmed that the 7th Pay Commission will submit is report to the Government next month. With the report being given a final shape, certain pieces of information have already started to hit the media. Some of the workable recommendations of the commission are out.
In 2006, a number of such unconfirmed reports surfaced, when the 6th Pay Commission report was being prepared, because the report was not submitted to the government on time. Due to the delay, there was tremendous curiosity to find out what the report contained. This led to a lot of rumors. Since the internet didn’t become that popular in those days, those rumors were hard to believe. Most of them were circulated by word of mouth.
Now, despite the fact that there are plenty of news sources, since it has become possible to trace the point of origin of the information, such rumors have reduced. This time around, the information was given by the leaders of Federations. Yet, one can neither completely accept them as true, nor dismiss them as entirely false.
Since the government and the major employees federations have their own websites, it has become possible for the information to spread to the corners of the world within minutes. Also, retracts and denials too have become equally fast, thus killing the rumours immediately. With a number of other individual websites and blogs too covering the news about Central Government employees, the readers are now able to differentiate between news and rumours.
There is nothing surprising or shocking in the news reports that have now surfaced. A minimum basic pay of Rs.21,000 is an expected one. The recently released Kerala Pay Commission too has recommended the minimum wage at Rs.17,000 (from 01.01.2014 onwards). The National Council has demanded that it be Rs.26,000 per month.
It is a well known fact that the Grade Pay System had been a source of constant irritation. The dual Hierarchy System (Promotional hierarchy and Grade Pay hierarchy) will come to an end. There will not be any more confusion about the promotions that come through MACP.
The Multiplication Factor of 2.86 does sound very low. NC JCM had pressurized the Pay Commission to fix it at 3.7. The 6th Pay Commission had fixed it at 1.86, and also given Grade Pay. Since the DA now stands at 125% (including July 2015 and January 2016), this could end up being substantial.

Payments bank licence imminent for India Post If approved, it will be consistent with PM’s plan to use post offices to deliver financial services to remote areas

India Post has 155,015 post offices across the country, of which 139,144 are in rural areas. Photo: Ramesh Pathania/Mint
New Delhi: The grant of a payments bank licence to the India Post is imminent, according to a senior finance ministry official who did not wish to be identified.

If approved, it will be consistent with Prime Minister Narendra Modi’s vision to utilize the existing network of post offices to deliver, in addition to the existing bouquet of postal services, financial services to the remotest parts of the country through digital connectivity and innovations.

India Post has 155,015 post offices across the country, of which 139,144 are in rural areas.

To give a fillip to these existing branches, the department of posts has tied up with e-commerce firms such as Snapdeal and Amazon to deliver parcels—parcel revenue for fiscal year 2014-15 rose 37% compared to a decline of 2% in financial year 2013-14, as reported by the Press Trust of India on 12 July.

“India Post will most likely get payments bank licence as they have a good case,” said the finance ministry official.

On 9 July, communications and information technology minister Ravi Shankar Prasad said that the Reserve Bank of India (RBI) is expected to grant payments bank licence for the operation of Post Bank of India.

The finance ministry official cited earlier also said that post offices as payments banks may also be allowed to accept transactions for others who may be awarded payments bank licences.

The committee on payments banks headed by Nachiket Mor submitted its report last week and the licences are expected to be awarded by the end of August. However, the number of licences that will be issued is still not known.

Mor declined to comment, saying that as the head of the committee he cannot disclose details.

A payments bank can take deposits, allow remittances and offer simple financial products, but will not be allowed to lend. It will have to invest 75% of its funds in government securities and the minimum capital required to set up a payments bank is set at Rs.100 crore.
The central bank, in November, had invited applications for payments bank and small finance bank licences.

In total, 41 applications were received by RBI for payments bank licences, including from Reliance Industries Ltd, Tech Mahindra Ltd, Aditya Birla Nuvo Ltd and Airtel M Commerce Services Ltd, among others.

Shailendra Kumar Dwivedi, director, Post Bank of India, India Post, said that he cannot confirm the development and that he can only talk after the licence is awarded.

“Like everybody else, the minister (Prasad) must have also heard it from some quarters. But given the credentials and readiness of the postal department, it must get the licence,” he said, adding that right now, it is uncertain.

However, Dwivedi added that the department has started the process of engaging with consultants who will help implement and set up the bank as it anticipates the licence.

A representative of a consulting firm with which the department is in talks confirmed that the department is preparing to ensure a quick roll-out once the licence is granted.

The consultant declined to be identified because the firm has signed a client confidentiality clause.

“Since the basic idea is to cover the unserved or underserved to make them included, it should be somebody who has a large distribution network, reach, infrastructure and has prior experience is similar business (financial services), maybe someone like India Post or microfinance institutions,” the consultant said.

India Post already offers financial services under the heads of post office savings scheme, postal life insurance, money remittance service, mutual funds and forex services.

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