Seventh Pay Commission: Finance Ministry yet to receive report from Committee on Allowances

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Implementation of the Seventh Pay Commission (SPC) could take more time, with the Finance Ministry yet to receive a report from the Committee on Allowances. The Ashok Lavasa Committee was set up in July 2016 to review the recommendations of the SPC.

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Central government employees will see a huge spike in their salaries, with over 1 lakh present and ex-employees benefiting.

The primary purpose of setting up this committee was to check if the recommendations regarding the removing of certain allowances provided to central government employees should be implemented or not.

Finance Secretary Ashok Lavasa is heading the committee. The government gave four months to the committee to submit a report, with this deadline further extended until February 22, 2017.

Employee unions held a meeting with the committee members last month to discuss the viability of abolishing 51 allowances which employees are currently entitled to. The Seventh Pay Commission had recommended the subsuming of 37 other allowances in addition to these 51.

Employee unions are demanding the HRA be maintained at 30 per cent, 20 per cent and 10 per cent, depending on the city an employee lives and works in. This is an increase from the 24 per cent, 16 per cent and 8 per cent which the Seventh Pay Commission recommended.

The Seventh Pay Commission will cost the government exchequer an additional Rs.1.02 lakh crore each year. It envisages a 257% increase in salaries of central government employees, with the new minimum salary increasing to Rs.18,000 per month, up from the previous minimum of Rs.7,000 per month.

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