7th CPC - Minimum pay likely to be increased to “a balanced compromise”

Finance Minister Arun Jaitley will include the increase the pay hikes of central government employees in the budget in this month.

The recommendation of the Pay Commission will be included in the budget but will not see the minimum pay Rs 18,000.

The commission findings of pay hikes of central government employees were published in November, with a promise of Finance Minister Arun Jaitley to include the increase the pay hikes of central government employees in the budget in this month.


All trade unions and central government employees associations are unhappy with the proposed increase of minimum pay.
Some of the unions and associations had called for the minimum pay to be increased to Rs 26,000, while another wanted it raised to Rs 24,000.
Yesterday, the Finance Ministry official, works with implementation cell, said the minimum pay will be increased to “a balanced compromise”, while trade unions have said the increase should be made to good enough.


The Economists claimed minimum pay increase would cripple government finance as pay of all central government employees will be hiked on the basis of minimum pay, which also against the Pay Commission recommendations.


One of the famous economists, who requested to remain anonymous said , “policy decisions must be based on hard evidence, not aspirations. It is deeply frustrating to see important policy decisions being made in the absence of the necessary economic evidence.”


“There is no justifiable economic argument for increasing the minimum pay beyond the pay panel. It is sad to say but the only reason for the increase is political survival in the upcoming election of West Bengal, Assam, Kerala, Tamil Nadu and Puducherry in April-May,” he added



The Finance Ministry official said, “the evidence based approach, which is used by the Finance Ministry indicates that the Indian Economy can sustain a modest increase in the minimum pay of central government employees, without causing harm to other government businesses.”
Accordingly, the government determines to to hike Basic salary at least Rs 20,000 from Rs 18,000 recommended by the Seventh pay commission,

The The Seventh Pay Commission recommended raise in basic pay, a key segment that determines several allowances, is only 14.27 per cent – the lowest in 70 years. The previous commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008