The Union Cabinet on Wednesday approved the recommendations made by the 7th Pay Commission, which is likely to see a higher increase in the basic pay by nearly 15 percent for over one crore government employees and pensioners.
The Implementation of new pay scales recommended by the 7th Pay Commission will impact the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.
The key recommendations of the 7th Pay Commission is a 23.55 percent increase in salaries,
allowances and pension of central government employees and pensioners, which is estimated to put an additional burden of Rs. 1.02 lakh crore on the exchequer annually or nearly 0.7 per cent of GDP.
However, the hike is the lowest in last seven decades as it is built around the recommendation for a 14.27 per cent hike in basic pay.
The panel headed by Cabinet Secretary P K Sinha was set up to study the recommendations of the pay commission headed by Justice AK Mathur.
One of the key changes suggested by the pay commission has been the 'New Pay Structure', under which the existing system of pay bands and grade pay will be ejected and a new pay matrix will be brought in to bring about more transparency.