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The Empowered Committee of Secretaries will be headed by cabinet secretary K M Chandrasekhar, Science and Technology Minister Kapil Sibal said after the cabinet meeting.
The committee will mainly function as a screening committee for the pay panel's report and submit its final recommendations to the cabinet for approval, Sibal said.
Last month, the Justice B N Srikrishna pay panel had recommended hike for salaries of central government employees, fixing the pay of cabinet secretary and service chiefs at Rs 90,000 per month, and doubling most allowances that would cost the exchequer Rs 12,561 crore (Rs 125.61 billion)in 2008-09.
However, the recommendations drew flak from many quarters, including armed forces and IPS officers. To look into their grievances, the government recently constituted a committee headed by finance secretary D Subbarao.
The Sixth Pay Commission