New Delhi, January 24: Central government employees from April this year will get fair compensation under 7th Pay Commission, a top Finance Ministry official said. According to a report, The Sen Times said that the pay hike replacing pay and fitment formula for lower-level employees up to the pay matrix level 5, which had been recommended by the 7th Pay Commission and was approved by the Cabinet.
“This will be put into the Gazette in next financial year and will be implemented from April, 2018,” The Sen Times reported. The 7th Pay Commission recommendations of minimum pay from Rs 7,000 to Rs 18,000 while the maximum pay is from Rs 90,000 to Rs 2.5 lakh with a fitment factor of 2.57 times uniformly of basic pay of 6th Pay Commission, was given nod by the Cabinet on June 29, 2016.
The pay panel also recommended that are also facing various shortcomings including pay ratio. In last few years subsequent pay commissions had reduced the ratio of pay between lowest-earning employees and top bureaucrats from 1:41 in 1947 to 1:12 in 2006, while the 7th Pay Commission increased its 1:14. Hence, the central government employees’ unions had kept their demand that the minimum pay Rs 26,000 instead of Rs 18,000 and 3.68 fitment factor for all employees.
Accordingly, they had also threatened to go on indefinite strike over pay hike on July 11, 2016. The unions had also suspended their indefinite strike on June 30, 2016, following the assurance from Arun Jaitley to look into the issue “core demand of increasing Pay and fitment formula” through a High Level Committee.
Meanwhile, a SBI report on Monday said that after the implementation of 7th Pay Commission and after the rise in personal disposable income the income tax limit needs to be raised by Rs 50,000 to Rs 3 lakh. The SBI’s Ecowrap report said that if the exemption limit of interest payments under housing loan is increased to Rs 2.5 lakhs for existing home loan buyers, from Rs 2 lakhs now, it will benefit 75 lakh home loan buyers and cost the government just about Rs 7,500 crore.