Latest Updates : Things you need to know about the 7th Pay Commission hike

Latest Updates : Things you need to know about the 7th Pay Commission hike : The much sought after- government jobs might have become a desire after the Union government gave a go-ahead to the recommendations of 7th pay commission effecting a 23 percent salary hike to government employees.


This at a time when private sector employees have not seen an average pay hike of more than 10-11 percent. The government jobs always attract everyone rather than a private sector.

Here are 10 Mind-Blowing Things about the 7th Pay Commission hike:-

1. The minimum salary approved by the board is Rs 18,000 per month and the maximum salary Rs 2.5 lakh a month (Cabinet Officer) which was before Rs. 90,000 per month.

2. The opening salary of Rs 18,000 is more than fold the current pay of Rs 7,000. On the other hand, the maximum salary has been raised from Rs 90,000 a month to Rs 2.5 lakh. The proportion of minimum to maximum salary is 1:11.4 to 1:13.9 respectively.

3. The cover of gratuity has been raised from the existing Rs 10 lakh to Rs 20 lakh.

4. Around 10 million government servants (including six million beneficiaries) would serve from the pay hike.

5. The hike would come into force from January 1, 2017, and the updated salaries are expected to be paid July 1, 2016, onwards. Therefore, all government servants would receive six months’ arrears.

The government will determine if the arrears for the six months will be given at once or in installments.

6. The rise in salaries of government servants is likely to boost purchasing power by Rs 40,000-50,000 crore and savings proceeds by around 30,000 crores. The boost to the consumption would rise 0.5 percentage points to the total GDP.

7. The hike would mean an added cost of Rs 1 lakh crore to the government, of which pension amounts would account for Rs 33,700 crore.

8. A part of the added cost to the government would be counterbalanced by the raised income tax and sales tax following risen consumption.

India Ratings secures the net influence on the central government finances at Rs 80,600 crore.

9. The hike in salary may increase reflation in the market. The RBI’s current reflation forecasts did not take into account the influence of salary hike.

10. The 6th pay commission had approved a pay hike of 40 percent in 2008, effective from January 1, 2006.