New pay scales to put extra burden of Rs 1.02 lakh cr in FY17

Implementation of new pay scales recommended by the 7th Pay Commission is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, government said today.
The implementation of recommendations of the Pay Commission, however, would be after approval of the Cabinet on completion of screening of suggestions by a high-level panel of secretaries, the Rajya Sabha was informed today.
The implementation of the new pay scales is estimated to put an additional burden of Rs 1.02 lakh crore (or 0.7 per cent of GDP at current market prices) on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016.

In a written reply, Minister of State for Finance Jayant Sinha also said that the announcement of Dearness Allowance has no impact on the recommendations of the Pay Commission.
Giving details of financial implications of the recommendations, Sinha said the burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Without the Pay Commission recommendations, the outgo would have been Rs 2.44 lakh crore.
The outgo towards HRA will increase by Rs 17,200 crore to Rs 29,600 crore. The outgo on pension front will be Rs 1.76 lakh crore (increase of Rs 33,700 crore) and on other allowance will be Rs 36,400 crore (up Rs 12,100 crore).

The Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission was set up in January.
The recommendations of the Pay Commission will have bearing on the remuneration of 47 lakh central government employees and 52 lakh pensioners.