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Sixth Pay Commission update

Posted by Irus on August 14, 2008

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Today the Cabinet ratified the recommendations of the Sixth Central Pay Commission with minor modifications.  The jump in pay is expected to be upwards of 30 per cent after taxes. The system of four Pay Bands with 20 Grade Pays recommended by the commission has been accepted.

The median salary for central government employees in India currently stands at Rs 250,092 per annum, while that of private sector companies at Rs 408,605. It is expected that the figure for government employees will rise to Rs 352,611 — which would leave a small gap of Rs 50,000 compared to the private sector.      

However, as in the past, post pay commission most private sector companies revise their pay scales upwards which further increases this ever widening gap.

So far the highlights of the report are

  1. Minimum basic Salary – Rs. 7000
  2. New allowances to be effective from 1st September 2008
  3. IRS officers demand to be considered a superior service to IAS and IPS rejected
  4. Education Allowances for employees for upto two children – Rs. 1,000 (Earlier, it was Rs. 100)
  5. Maximum Basic Salary – Rs. 90,000 (Cabinet Secretary)
  6. National Holidays – 3
  7. Gazette Holidays to be canceled
  8. Pay hike will be implemented from January 01, 2006
  9. Maternity Leave : 6 Months
  10. HRA in A-1 Cities – 30%  (Unchanged)
  11. HRA in A, B, B-1 Cities – 20%
  12. Incentive Schemes to be announced
  13. New Medical Insurance Scheme to be launched for government employees
  14. Market-driven pay for scientists and all other jobs that require professional skill set.
  15. Total number of salary grades to be reduced from 35 to 20.
  16. The wage hike would increase the financial implication for the Centre by Rs 17,798 crore annually and the arrears with effect from January 2006 would cost Rs 29,373 crore, Information and Broadcasting Minister P R Dasmunsi told reporters after the Cabinet meeting.
  17. The government increased the minimum entry level salary of a government employee to Rs 7,000 against Rs 6,660 recommended by the Commission headed by Justice B N Srikrishna who submitted the report in March this year.
  18. Consequently, it would push up the total emoluments of an employee at the lowest level beyond Rs 10,000 per month including allowances.
  19. It also increased the rate of annual increment from 2.5 per cent to 3 per cent.
  20. In the defense sector, it approved at least three assured promotions for all defense forces personnel and civilian employees under the modified Assured Career Progression scheme.
  21. While civilians would get this after 10, 20 and 30 years of service, defence forces jawans would be promoted under ACP after 8, 16 and 24 years.
  22. The hiked salary would be given to the employees beginning September this year and the arrears from January 2006 would be given in cash in two installments – 40 per cent this fiscal and 60 per cent in 2009-10.
  23. The financial implication of Pay Commission on the General Budget would be Rs 15,717 crore and Rs 6414 crore on Railway Budget in 2008-09.
  24. The government’s present salary bill is over Rs 70,000 crore and the pension bill is over Rs 30,000 crore.
  25. Finance Minister P Chidambaram said the budget deficit target would be adhered to, despite the implementation of the Pay Commission recommendations.
  26. The government for the first time approved Military Service Pay for armed forces personnel, under which officers would get Rs 6,000 over and above their pay per month.
  27. The lowest limit of disability pension for defence personnel would be doubled to Rs 3100 a month.
  28. No Cabinet Secretary rank for Intelligence Bureau chief, the three Service chiefs or the Chairman, Railway Board
  29. Group D personnel to stay (peons in ministries and porters in Railways)
  30. Military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month
  31. DIG-scale abolished in IPS and Indian Forest Service
  32. The salaries of Brigadiers will be in Pay Band 4 (Rs 39,200-67,000) as against the suggested pay band 3 (Rs 15,600 – 39,100) previously.

It is expected that the actual pay-out would come in November after the monsoon session of Parliament in September passes the Finance Ministry’s supplementary Demand For Grant to fund the wage bill.

Source: http://pib.nic.in/archieve/others/2008/aug/r2008081405cab.pdf

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