Government employees cutting across grades, from peons to senior officers, were overjoyed after the Centre on Wednesday decided to constitute the seventh Pay Commission.

While it is too early to know who will chair the commission or what will be the recommendations, none of it stopped jubilant central government employees from distributing sweets in some departments, though Diwali is more than a month away. Ironically, the reaction was muted in the finance ministry like the stony walls of the North Block. Most of the staff did not display any outward exuberance, although they welcomed the government’s decision in a hush-hush tone.

Maira smells elections
Planning Commission member Arun Maira said in Kolkata on Wednesday that the government's move to set up the Seventh Pay Commission was in line with the general elections to be held next year.

Maira said the move came from the Centre despite it being criticised on the timing to set up the Pay Commission.

“We are going for elections next year, you have to get elected or else you can’t do what you want to do,” he told reporters here on the sidelines of an event organised by the Federation of Indian Chambers of Commerce and Industry.

It is the expenditure department of the finance ministry that will ultimately implement the recommendations. Or are they worried about the impact on the fiscal situation? A senior official said the 7th Pay Commission should correct the anomaly of the previous pay panel, which had recommended a lower pay increase in the S4 to S-23 grades, compared with employees of S-24 and higher grades.

Meanwhile, trade unions representing central government employees hailed the announcement. They went a step further in their demand and pressed for implementing the recommendations with retrospective effect from January 1, 2011. The government plans to implement them from calendar year 2016.

“We welcome the government’s move to set up the 7th Pay Commission, but we have a reservation. It should be implemented with effect from January 1, 2011 as in the case of Central PSUs whose employee pay scales are revised every five years,” Confederation of Central Government Employees and Workers President K K N Kutty told PTI.

Kutty said that the Confederation would press for merger of up to 50 per cent of dearness allowance with the basic pay, which is a prerequisite for setting up a pay commission.

The merger of DA with basic pay will help employees as certain allowances are paid as proportion of the basic pay and hence merger results in higher allowances.

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