Central Government fails to implement 7th pay commission arrears on allowances

Central Government fails to implement 7th pay commission arrears on allowances

New Delhi: Despite all that has been said about the arrears on allowances under the 7th Pay Commission recommendations, an important issue for central government employees, which has now been notified on June 6 without arrears.

Finance Minister Arun Jaitley had claimed his commitment to implement the allowances after four months of the basic pay hike but it failed to come true.

More than 18 months have passed since the 7th pay commission report was submitted and 11 months have elapsed since the union cabinet approved the 7th Pay Commission recommendations for basic salary hike of central government employees, the centre now notified 7th pay commission allowances without arrears.
The government has given higher basic pay in August 2016 with arrears, effective from January 1, 2016 to its employees on the recommendations of the 7th pay commission but the increased allowances, which comes into effect from July 1, 2017.

The government used delaying tactics to save the government money to pay revised allowances without arrears. Hence the ‘Committee on Allowances’ headed by the Finance Secretary Ashok Lavasa was formed for examination allowances.

However. the government stuck with the 7th Pay Commission's recommendations on allowances and gave nod accordingly but no recommendation of the ‘Committee on Allowances’ was approved.
The delay in the implementation of allowances is chiefly because of the financial gains of the government, while financial condition of the government is very sound.

The delayed implementation of allowances have saved the government nearly Rs 40,000 crore.
The non-payment of arrears on allowances has caused tremendous irritation and frustration among the central government employees.
TST

Spike in bank deposits in September due to 7th Pay Commission arrears: FM

Spike in bank deposits in September due to 7th Pay Commission arrears: FM

New Delhi: Union Finance Minister Arun Jaitley on Saturday said there was a spike in bank deposits only in September during the last one year, largely due to the 7th Pay Commission arrears being released in August.
The FM was addressing a press conference here on the current demonetization move.

The 4.8 million central government employees and 5.2 million pensioners got theirs arrears of basic pay and pension arising from implementation of the 7th Pay Commission recommendations in one go in August salaries and pension respectively. The hike in basic pay and pension has been made effective from January 1, 2016.

Jaitley said it is a massive operation to replace 86 per cent of currency under circulation. The SBI alone had done Rs 2.28 crore transactions in the past two days; the total banking transactions were around five times of that, he added.

The minister said the SBI alone had got Rs 47,868 crore deposits in the past two days; total deposits in all the banks must be around Rs 2 lakh crore to Rs 2.25 lakh crore, he added.

The RBI bank currency chests numbering 4,000 had enough currency stocks, Jaitley assured.

The Finance Minister appealed to the people to stagger depositing the defunct currency and not to crowd the banks.

He said it would take two to three weeks to re-calibrate two lakh ATMs to vend out new Rs 2,000 and Rs 500 notes.

He said stock details had been sought from jewellers on reports of dealings in defunct currency, adding that the government would not allow any illegal transaction in bullion.

He said the supposed chip in the Rs 2,000 note and digital lockers were mere rumours.

Inputs with PTI

7th pay commission arrears not to push up car, house sales

7th pay commission arrears not to push up car, house sales

New Delhi: Car and house sales are not expected to go up after giving the seven months’ arrears of the 7th Pay Commission recommendations to central government employees on August 31.

As per the notification and resolution, central government employees will receive an average 14.27 per cent hike in basic pay effective from January 1, 2016.

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

The hype around the 7th Pay Commission recommendations is completely unnecessary, as the real impact is going to be much lesser both in absolute and relative terms compared with the previous 6th Pay Commission. As such, the employees can’t spend more to buy a car or a house.

7th pay commission arrears, its nothing more than peanut for lower and middle level employees. A middle level employee will take home the 7th pay commission arrears that may range from Rs 40,000 to Rs 80,000 on August 31.

How can he purchase a car? With the take arrears salary of Rs 40,000, getting a car loan of Rs 4 lakh is a big deal for an employee. The employee has to bring in margin money to the tune of 15 per cent to 30 per cent of the loan amount, depending on banks.

So, an employee, who is to get arrears Rs 40,000, he will have to pay Rs 80,000, the margin amount for a car loan, which is 20 per cent of a car of Rs 4 lakh. It seems impossible for him to pay the margin money upfront.

Over 80 percent central government employees are working in middle and lower level rungs.

So, bankers say that the 7th pay commission arrears effect on retail lending will be a little.

The last such comprehensive hike in salaries did lead to a sharp increase in consumer spending. House, car and two-wheeler sales, for instance, recorded a sharp surge shortly after the sixth pay panel payouts.

The sixth pay commission report was submitted in 2008, with the higher salaries coming into effect retrospectively from January 1, 2006.

It entitled government employees to huge arrears, a part of which was spent on margin money for buying cars and houses.

The Finance ministry Office Memorandum No.1-5/2016-IC said on Friday, “The 7th Pay Commission arrears shall be paid in cash in one installment along with the payment of salary for the month of August 2016.”

Accordingly, The government’s overall arrears payout will be lower because of only seven months arrears this time, compared to the previous pay commission, which came in late.

It may be recalled that a month ago, Finance Minister Arun Jaitley had “congratulated” central government employees after the Union Cabinet accorded its approval to the 7th pay commission recommendations.

TST

Banks to launch new loan schemes to grab pay commission arrears

Banks to launch new loan schemes to grab pay commission arrears

New Delhi: State Bank of India, the country’s largest lender, and its rivals are set to launch programmes aimed at encouraging central government employees in line for fatter 7th pay commission arrears to borrow and spend on consumer goods, cars and homes.

The government announced its employees would get the higher salaries from August along with arrears of the first seven months under the Finance ministry Office Memorandum No.1-5/2016-IC issued on Friday. The pay commission award is due from January 1.

Punjab National is also firming up plans to tap salary increases to the tune of a total Rs 70,000 crore through this financial year thanks to the award of the Seventh Central Pay Commission.

State-owned SBI will raise the age bar on loan repayments by five years in the two schemes it’s planning. It will also offer lower interest rates and the flexibility of paying higher installments in the first few years.

“We will launch SBI Privilege to suit the needs of the borrowers who will be benefiting from the pay commission,” SBI managing director Rajnish Kumar told The Economic Times. “This new scheme will allow home loan borrowers to service loans till the age of 75 from the existing age of 70 years besides a five basis point reduction in interest rates if they repay through check-off facility (or payments deducted directly from the salary).” A basis point is 0.01 percentage point.

Another progamme, SBI Shaurya, is aimed at defence personnel, who are also in line for pay and pension increases.

“We expect that the major demand will be from personal loans and car loans,” a Bank of Baroda executive told The Economic Times. “We will be soon be coming out with interesting offers on these two product lines.”

After the sixth pay commission award in 2008, the sales of two wheelers and passenger cars rose 25%. Analysts expect a similar bump, though not as sharp, this time around.

The increase in salary this time is an average 15% compared with 40% last time. Plus, last time the arrears were for two years, resulting in a bigger surge.

Inputs with ET

7th Pay Commission arrears to be paid in August

7th Pay Commission arrears to be paid in August

New Delhi: The central government is going to start payment of salaries to its 48 lakh officials and employees according to 7th Pay Commission award from July and six months’ arrears are to be paid in August.

As per official calculation, no huge amount will be required for the payment of arrears.

The government in its annual budget has provisioned Rs 70,000 crore to meet the demand for implementation of 7th Pay Commission for central government employees which will take effect from January 1, 2016, while the allowances would be paid from July 1, 2016.

Basic salary of central government employees is likely to be tripled under the 7th Pay Commission award with employees in the lower rung getting the highest percentage of raise.

In the highest grade, basic salary is likely to rise around to Rs 2,70,000 to Rs 2,50,000 and in the lowest grade to Rs 21,000.

In June end, the cabinet is likely to approve the new pay scales for central government employees after considering report of the 7th Pay Commission, led by Justice A K Mathur, and the report of the 13 member Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission, which was set up in January.

The officials familiar with the developments told The Sen Times that the Finance Minister Arun Jaitley has not been under pressure to meet the demand as he has surplus money in the national exchequer.

“We have provisioned for around 60-70 per cent of the total burden that was talked about,” the officials said adding about Rs 70,000 crore has been provided in the Budget.

The government will issue a circular in respect of online pay-fixation, which will reduce hassles as doing the same manually is both time-consuming and harassing. Pay fixation is a mandatory procedure for getting new pay and perks, the officials told us.

“We’re at the for issuing the notification and one more month will be required to issue after cabinet nod, so we hopefully say that central government employees will get new pay and arrears in July and August respectively,” a source close to the developments told The Sen Times.

TST