The Cabinet, headed by Prime Minister Narendra Modi, Wednesday cleared the recommendations of the 7th Pay Commission according to which the overall hike in salary and allowance of central government employees and pensioners comes to 23.5 percent.
"The recommendations of the Pay Commission with respect to pay and pension, have been accepted by and large by the government. And those recommendations will be implemented with effect from January 1, 2016, and the arrears would also be paid in this year," Finance Minister Arun Jaitley told reporters here after the Cabinet had approved the recommendaions.
The Finance Minister said the government is "not surprised" at the additional expenditure, which is estimated at Rs 102,100 crore as per official estimates.
The Cabinet has also decided that arrears of pay and pensionary benefits will be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next financial year.
The new scales of pay provide for entry-level basic pay going up from Rs 7,000 per month to Rs 18,000, while at the highest level i.e. Secretary, it would go up from Rs 90,000 to Rs 2.5 lakh. For Class 1 officers, the starting salary will be Rs 56,100.
The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.
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