The essential lowdown: Who gets how much more, which sectors cost us the most and how it compares with rest of the world.
The seventh central pay commission has recommend a 23.55% increase in the pay and pensions of government employees in its report submitted on Thursday evening. Included in its financial bonanza is a whopping 2.5 times increase in the minimum salary of government employees at the lowest level which now begins at Rs 18,000.
According to the new pay bands, a government official at the highest level will have a salary of Rs 2,25,000 a month now while a Cabinet Secretary will take in Rs 2,50,000 as compared to less than rupees one lakh a month earlier.
The pay rise will benefit more than 4.7 million employees and 5.2 million pensioners in the country.
Pay commissions are set up every 10 years by the government to revise and revamp salaries of government employees. The sixth pay commission had raised the minimum basic salary by almost three times and took it to Rs 7,000 which has now reached the Rs 18,000 mark.
The commission this year has recommended a modest 16% increase in basic pay, 24% hike in pensions but allowance payout is set to increase by a substantial 63%.
As the above chart shows, the minimum basic salary of government employees has risen from Rs 35 as recommended by the first pay commission to its current levels in a matter of six decades.
The salary is only one of the parts of the government’s total wage burden as pension and allowances account for an equal, if not a bigger share, of its remuneration budget. Here’s how the components have changed over the years.
The total financial implication of the seventh pay commission has far surpassed expectations as it is going to cost an additional Rs one lakh crore to the exchequer.