Central government employees and
pensioners are likely to be disappointed as the 7th Pay Commission is
expected to propose an approximate 15 per cent hike in salaries starting
January 1, 2016, sources told NDTV.
The recommendation, which will become
effective after a Cabinet nod, will impact 50 lakh central government
employees and 54 lakh pensioners.
The 15 per cent salary hike likely to
be recommended by the 7th Pay Commission will be much lower than the 35
per cent hike employees got on implementation of the 6th Pay Commission
in 2008.
A 15 per cent salary increase would
push up the central government’s salary bill by Rs 25,000 crore, which
is 0.2 per cent of India’s GDP, according to Bank of America Merrill
Lynch estimates.
Economists expect the wage hikes to
boost the consumption-driven recovery in the domestic economy. Sales of
affordable homes and consumer durables such as cars, two-wheelers and
other electronic items are likely to pick up, analysts say.
On the flip side, salary hikes are also expected to stoke inflation and fiscal pressures, economists say.
According to sources, the
recommendations of the 7th Pay Commission will be submitted to the
finance minister on Thursday. The 7th Pay Commission is unlikely to
suggest changes in the retirement age of central government employees,
sources said.
Pay Commissions are meant to review the salary structure of central government employees and are set up every 10 years.
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