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Cabinet clears pay hike for 1 crore government employees, pensioners

Last updated on: June 29, 2016 17:49 IST

The pay panel had in November recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years.

MoneyIn a bonanza for over 1 crore (10 million) government employees and pensioners, the Cabinet on Wednesday approved implementation of the 7th Pay Commission, which had recommended an overall hike of 23.5 per cent.

"Congratulations to central government officers, employees & pensioners on a historic rise in their salary & allowances through the 7th CPC (Central Pay Commission)," Finance Minister Arun Jaitley tweeted shortly after the meeting of the Cabinet headed by Prime Minister Narendra Modi.

It wasn't, however, known immediately if the Cabinet had bettered the hike recommended in salary and allowances of nearly 50 lakh (5 million) government employees and 58 lakh (5.8 million) pensioners.

An official said the Cabinet has approved implementation of the recommendations from January 1, 2016.

The pay panel had in November recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years.

The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.

Pay Panel graphAfter considering the increase proposed in allowances, the hike in remunerations comes to 23.55 per cent.

The 23.55 per cent overall hike in salaries, allowances and pension would entail an additional burden of Rs 1.02 lakh crore (Rs 1.02 trillion) or nearly 0.7 per cent of the GDP, to the exchequer.

The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000.

The secretaries' panel may have recommended raising minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 325,000.

While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.

Around Rs 70,000 crore (Rs 700 billion) has been provisioned for it, the official said.

Illustration by Uttam Ghosh/

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