Economy is set to rise with pay rise due to 7th pay Commission
New Delhi, April 6: The central government employees are ardently waiting for the implementation of the 7th Pay Commission as a final date has yet not been decided for the same. RBI in a report on Monday has revealed something which is a bit worrisome as well as brings some good news. The report reveals that implementation of the 7CPC will put an upward pressure of 1-1.5 per cent on inflation, but is expected to boost GDP by around 40 bps (basis points increase) during the current fiscal, RBI said in a report today.
Persistence of inflation in certain services warrants watching, mainly due to pay hikes, he said, while there will be some offsetting downside pressures stemming from tepid demand in the global economy. But the government’s effective supply-side measures keeping a check on food prices, and “the government’s commendable commitment to fiscal consolidation” will have a salutary impact on inflation. On growth, which it has retained at 7.6 percent for this fiscal, the report said, “The uneven recovery in growth in FY16 is likely to strengthen gradually in FY17, assuming normal monsoons, the likely boost to consumption demand from the implementation of the pay commission and OROP, and continuing monetary policy accommodation.” Also read: Seventh Pay Commission: Good News! Employees likely to get minimum salary of Rs 20,000 The gross value add growth projection for 2016-17 is retained at 7.6 per cent, “with risks evenly balanced”. The Centre, in January this year, had set up a high-powered panel headed by Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of 47 lakh central government employees and 52 lakh pensioners.
Source:- Economics Times