Latest News (August 14): Cabinet approves Sixth Pay Commission Report

Breaking News! A pay hike much higher than what was recommended by the Sixth Pay Commission, has been approved by the Union Cabinet. The latest increase in annual increment and the payment of arrears was reportedly incorporated after PM Dr. Manmohan Singh's intervention. The latest revision in the pay commission report will bring more cheer to the central government employees.

The new package, which will benefit 55 lakh Central government employees, will be announced on August 15 by the Prime Minister during his Independence Day speech. According to latest reports, there will be an additional 20 percent hike over the pay packages suggested by the Sixth Pay Commission. The Pay Commission had suggested a gross 40 percent hike. The minimum basic pay of an entry level government employee has been increased to Rs. 7000. That means, they will get around Rs. 11,000 per month.

The net increase in the pay package will be around 30 percent with the additional increase for lower grade staff. The Pay Commission had calculated the dearness allowance as 74 percent. However, it is currently 83 percent. The Union Cabinet proposal also suggested a uniform 3 per cent raise in pay every year. Currently, the Central government employees get an automatic hike of Rs. 500 in the basic pay every year.

Finance Minister P Chidambaram had suggested that the new pay hike be effective from January 2007. However, it was rejected by the Cabinet Committee. The new pay hike will be effective from January 1, 2006, which means there will be heavy cash bonanza for the bureaucrats in terms of arrears. Chidambaram's proposal of putting the arrears in the General Provident Fund was also rejected. The Pay Commission had recommended that 40 percent of the arrears be paid in the current fiscal and the remaining 60 percent next year. The arrears would be paid in cash.

The employees will get new pay packages from September onwards. The gazetted holidays have been abolished and there will be only three national holidays. The central government employees will be working 5 days a week. Maternity leave for the women has been increased to 6 months.

Although the Pay Commission had suggested the scrapping of Group D personnel such as peons and coolies and wanted them to be subsumed in Group C, the panel has rejected it. The demands of both armed forces and IPS officers were approved by the Union Cabinet. A DGP will get a salary of Rs. 80,000 per month. The government will have to bear an additional burden of Rs. 15,700 crore due to the unprecedented pay hike.

The Armed Forces have reasons to smile, as most of their demands have been met. In addition to the hike in their pay structure, all military officials below the officer rank would get Rs. 2000 per month as military service pay (MSP). Higher ranked military officials will get Rs. 6000 military service pay (MSP). Brigadiers and Colonels will be put in Pay Band 4 (Rs. 39,200 - Rs. 67,000). All mid-level defence officials will be put on higher pay band. The disability pension has been increased from Rs. 1550 to Rs. 3100 per month. There will be three confirmed promotions in all government jobs including the armed forces.

Despite the approval of pay hike, the employees belonging to mid-level and junior level have expressed concerns over the exact breakdown of their pay. The government hasn't yet divulged the details of the salaries of the government employees. While everyone is sure about a good hike, they are still in dark about the exact amount they will be getting. The press release from the Government of India can be seen here...

Here are the highlights of the implementation of Sixth Pay Commission Report:

• 55 lakh Central government employees will be benefited.
• There will be an additional 20 percent hike over the pay bands suggested by the Sixth Pay Commission.
• The minimum basic pay of an entry level government employee has been increased to Rs. 7000. That means, they will get around Rs. 11,000 per month.
• A uniform 3 per cent raise in pay every year for all central government employees.
• The new pay hike will be effective from January 1, 2006.
• 40 percent of the arrears be paid in the current fiscal and the remaining 60 percent next year. The arrears would be paid in cash.
• The gazetted holidays have been abolished and there will be only three national holidays. The central government employees will be working 5 days a week.
• Maternity leave for the women has been increased to 6 months.
• Flexible working hours for people suffering from disability.
• No scrapping of Group D personnel such as peons and coolies.
• All military officials below the officer rank would get a military service pay (MSP) of Rs. 2000 per month.
• Higher ranked military officials will get a military service pay (MSP) of Rs. 6000.
• The disability pension for military personnel has been increased from Rs. 1550 to Rs. 3100 per month.
• There will be three confirmed promotions in all government jobs including the armed forces. While the civilians would get the promotion after 10, 20 and 30 years of service, the armed personnel would get it after 8, 16 and 24 years.
• Brigadiers and Colonels will be put in Pay Band 4 (Rs. 39,200 - Rs. 67,000). All mid-level defence officials will be put on higher pay band.
• A DGP in the state will get a salary of Rs. 80,000 per month.