The 7th Pay Commission, cleared by the Cabinet on 29th June 2016 will benefit nearly 47 Lakh Central Government employees and also around 53 Lakh pensioners. All the employees will get a salary hike of around 23.5% which will be effective from January 1, 2016. The new scales introduced would result in almost double the entry-level basic pay which will go up from Rs.7000 to Rs.18,000 per month. Class 1 officers starting salary will be Rs.56,100 while Secretary level salary will go up from Rs.90,000 to Rs.2.5 Lakhs.
Some Key Highlights :
– Gratuity ceiling doubled to Rs.20 Lakh
– Minimum pension has been increased to Rs.9000.
– Basic pay more than doubled from existing Rs.7000 to now Rs.18,000/- per month
– Pay hike to be between 14.3-25%
– Increase to be effective from 1st January 2016
– Salary increase from July 1, 2016
– 6 months
– 3% annual increment to continue
Demand Boost – Sales of FMCG, durables, auto & mobiles will get a boost.
Savings – Will result in new/increased savings as also help lower interest rates.
Stock Markets – Will benefit due to higher demand and bigger financial savings
Realty boost – May result in additional demand in Realty sector
Economy – May lift the economy due to higher demand
The Downside :
Inflation – Demand boost may result in inflation jump.
Fiscal Deficit – Staying with the fiscal deficit target of 3.5% GDP could definitely pose a challenge
Railways – With the impact of Rs.24,325 Crore, this could put a big financial burden on the already troubled Railways
Congratulations to everyone who will benefit directly or indirectly from the 7th Pay Commission.
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