Income tax at source would be deducted only on 40 per cent of salary arrears to central government employees in the current fiscal on implementation of Sixth Pay Commission recommendations, government said on Tuesday.
In far-reaching reform measures to the salary structure of an estimated 4.5 million central government employees, the sixth Pay Commission report submitted to the finance ministry today recommended an across-the-board effective salary hike of about 28 per cent, performance-linked increments, fewer holidays and a new medical insurance scheme.
This time, five states, including Tamil Nadu, have requested the Centre to delay the pay hikes.
How could India@75 improve law and order, courts, social, physical and soft infrastructure, efficient cities, e-governance, ease of doing business and other essential state functions by 2022, asks Shailesh Pathak.
Officials cited the example of the Sixth Pay Commission.
Since most of the States' coffers are depleting the hike in salaries in states is unlikely to match the central government. The payout is likely to be deferred levels. Besides, many states have their own pay commissions. However, state govt employees are assessing whether it is the central pay commission's recommendations that will be more beneficial for them or the state govt's own, as state commission's recommendations are reviewed every 5 years and centre's every 10 years.
The central government employees may get increment in their salaries on the basis of their performance as the Sixth Pay Commission is looking into the possibility of adding productivity-linked incentives to their overall income.
General Nirmal Chander Vij, former Chief of Army Staff, wrote a letter in anguish to Prime Minister Manmohan Singh against the adverse implications of the sixth pay commission on the armed forces. The letter written on April 17, 2008, speaks volumes about the armed forces' dissatisfaction, which no government can ignore.
The Centre on Tuesday said it cannot give blanket assurance to states to help them come out of financial problems following implementation of the 6th Pay Commission awards by them.
Consumer goods manufacturers, expecting to see a revival of demand from the nearly Rs 16,500 crore Pay Commission arrears for government employees, are likely to be disappointed.
The challenge of cleaning up the taxation system and introducing the goods and services tax (GST) regime cannot be underestimated.
The minimum wage of Rs 80, which is applicable to central public sector undertakings, will see a 30 to 40 per cent jump in a single year once the changes are notified. The decision to hike the minimum wage level was taken by the Central Advisory Board at its meeting chaired by Minister for Labour and Employment Oscar Fernandes last week. The National Floor Level Minimum Wage of Rs 80 is likely to cross Rs 100 once the notification is issued.
The state is now under pressure to revise the salaries of its 800,000 employees, which would add to the strain of an already debt-laden state exchequer.
'The non-implementation of the Seventh Pay Commission, almost a year after it was implemented for civilians, is gradually beginning to hurt morale in the armed forces,' says Brigadier Gurmeet Kanwal (retd).
The Sixth Pay Commission is likely to significantly raise basic salaries for an estimated 4.5 million central government employees. The recommendations are expected to be submitted in January, a few months ahead of schedule, and the award is likely to come into effect from January 2006.
Leaders of major central trade unions on Wednesday made a strong demand before Prime Minister Manmohan Singh for restoring the interest rate on Employees Provident Fund to 12 per cent
With the government raising the gratuity limit, it makes sense to negotiate for a higher basic salary to ensure a better payout.
Pensioners to get 40% raise, more gains for octogenarians. The Union Cabinet has accepted this proposal, along with other recommendations of the Sixth Pay Commission on pension benefits for the estimated 3.84 million central government pensioners at a meeting here on Thursday.
The action was expected to affect the general efficiency levels of the Railways and could also eat into its profit margins estimated at a minimum loss of around 20 per cent margins compared to last year, claimed IRPOF. It, however, clarified that the officers will not take any action that will cause inconvenience to the general public.
Both the forces were of the view that inclusion of its personnel who have joined the service on or after January 1, 2004 in the new contributory pension scheme launched by the government was unfair.
The over 1.6 million employees of central public sector companies are demanding a salary increase of over 100 per cent, saying the average 40 per cent raise recommended by the Sixth Pay Commission for government employees is not enough. Salaries of public sector workers were last revised in 1997 and were scheduled for the next revision on January 1, 2007. The average gross monthly salary an ONGC executive earns today is between Rs 40,000 and Rs 50,000.
The central government babus have been given a big hike in TA/DA (travel allowance/dearness allowance) as part of implementation of the Sixth Pay Commission, but it may be only illusory as ministries and departments will get no additional funds to foot their bills.
Over 14 lakh (1.4 million) Indian Railways employees may proceed on indefinite strike in the last week of February next to press for their 10 demands, including the formation of Sixth Pay Commission.
'Instead of joining us in celebrating the strikes, the MoD has stabbed us in the back,' says a top general.
The law was amended to bring parity between public and private sector employees (including PSUs) after the gratuity limit was raised for central government on similar lines
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