Good news for govt employees: Cabinet clears 7th pay panel recommendations

4.7 mn central government employees to benefit from implementation of the Pay Commission suggestions

In a move that would benefit the 4.7 million central government employees, the Union Cabinet on Wednesday approved, with some modifications, the recommendations of the 7th Pay Commission.
 
“The Union Cabinet has approved the 7th Pay Commission recommendations with some modifications,” Finance Minister Arun Jaitley said at a press briefing in New Delhi.
 
Earlier, in April this year, a high-level committee headed by Finance Secretary Ashok Lavasa, tasked with examining the 7^th Central Pay Commission’s (7th CPC) recommendations on allowances, had submitted its report to Jaitley.

 
The report was then examined by an empowered group of secretaries, after which the Union Cabinet took it up. The outlay for allowances for the 4.7 million central government employees is expected to be around Rs 29,000 crore, as forecast by the pay panel.
 
In June last year, after implementing the CPC proposals on salary and pension, Jaitley had announced the Lavasa panel to examine the suggestions on allowances. The panel was to submit its report by October.
 
The decision on allowances was postponed because the CPC wanted a number of these to be abolished or subsumed, which employees’ unions opposed. A deferment on revising of allowances meant that as opposed to a burden of Rs 1.02 lakh crore as envisaged by the CPC, the government provisioned for Rs 84,933 crore in 2016-17 for pay and pension, including Rs 12,000 crore in arrears.

 
There are other recommendations on allowances which the Lavasa panel has examined. These include a change in the present system of accounting, wherein pay and allowances are clubbed and it is difficult to bifurcate them. The CPC recommended a separate object head for budgeting and accounting be used to record the expenditure.