Cabinet may clear 7th Pay Commission soon

Finally, the most awaited, yet the controversial 7th pay commission is likely to be announced to boost the central government employees’ survival prospects. The implementation which was due from Jan 1, 2016 was to be implemented during FY 2016-17.

This comes as a surprise from the Government, when the aftereffects  from BREXIT are yet to calm down. The 7th pay commission would put additional burden, which would equate to 0.7 per cent of GDP or 1.02 lakh crore out of the national treasury.

The Finance Ministry had kept Rs 70000 crore worth provision for 7th pay commission in Budget 2016 which accounted for nearly 60-70 per cent of the total burden. The GDP has reached 7. 6 per cent but there are concerns about the fiscal deficit target of 3.9 per cent in FY 2016-17.

P.K. Sinha, a cabinet secretary is appointed as the head of Empowered Committee of Secretaries and he is still working on the 7th pay commission process that promises pay hike to 4.8 million CG employees and 5.2 million central pensioners. P.K. Sinha sees a hike of 30 per cent which will increase the lower and upper salary limits to 23500 and 325000 p.m.

Arun Jaitley may announce a pay hike in July or August if everything else remains under control.  The BREXIT after effects make the economy uncertain, but will be offset with the weakening of rupee which has already hit 68.2.

The news is quite positive for the sectors that induce public spending. The Consumer Durables and FMCG companies, Auto segments and to some extent the Entertainment sector stocks will surge in the coming sessions and sustain after the pay commission is implemented.