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Pay panel opens its bag of bonanzas; recommends 40% salary hike

chid-bu In what could be a major bonanza for over four million Central government employees, the sixth pay commission on Monday recommended an average hike of 40 per cent in salaries and doubling most allowances that would cost the exchequer Rs 12,561 crore in 2008-09.

On the heels of substantial benefits to tax payers in the budget, the revised pay would benefit employees to the tune of Rs 18,060 crore by way of arrears as the commission wanted implementation of the package from January 1, 2006.

Immediately after submitting the report to Finance Minister P Chidambaram, Commission Chairman Justice B N Srikrishna said, "I have recommended something which is good for the nation... The average hike will be 40 per cent."

The Cabinet Secretary would be the biggest beneficiary with a fixed revised salary of Rs 90,000 a month, followed by Rs 80,000 for Secretary. The minimum entry level monthly salary would be Rs 6,660 in the pay structure that seeks to guard against any stagnation.

The recommendation, to be considered by the cabinet, pays special attention to defence personnel whose pay has been brought on par with civilian staff, besides making them eligible for special allowance up to Rs 6,000 per month.

Women and disabled

Women and disabled employees have been given a special treatment in the report through a recommendation for improved leave and working conditions.

The commission also recommended increase in benefits for women employees including maternity leave of 180 days, besides flexi-timings in certain cases.

Performance pay

The commission paves the way for awarding performers through a higher 3.5 per cent rate of increment against the normal 2.5 per cent.

At the same time, a performance related incentive scheme is sought to be introduced to replace the ad-hoc bonus scheme immediately, the report said, adding that the scheme was budget neutral.


The commission also sought to give major benefits to the pensioner, particularly as they grow older by recommending higher rates on attaining the age of 80, 85, 90, 95 and 100. It sought pension to be paid at 50 per cent of the higher of the average emoluments or last drawn pay without linking it to 33 years of service.

Contrary to reports, the panel seeks to retain the superannuation age at 60 years, while recommending concession on this count for scientists and medical specialists. The report also recommends bringing in experts on contract employment for posts requiring higher skills.

Justice Srikrishna said, "the biggest highlight of the report is to revise the salary structure in such a way to make the government machinery more efficient," and pointed to the recommendations relating to performance related incentive scheme and variable increments to promote high performance.

"Existing rates of most of the allowances will be doubled both in case of defence forces as well as civilian employees," the report said and added that education allowance reimbursement would be Rs 1,000 per child per month for the existing Rs 50 and recommended 10-fold increase in hostel subsidy to Rs 3,000 a month.


Justice Srikrishna clarified that though the annual cost of the recommendations was Rs 12,561 crore, savings of Rs 4,586 crore could accrue through implementation of various measures suggested by the panel, thus bringing down the net financial implication to Rs 7,975 crore.

Later, Commission Chairman Srikrishna told reporters that the average hike in salary would be 40 per cent, though for high skilled professionals such as of scientists, the commission has recommended market-linked salary packages with a provision for contractual employment.

"We have also recommended at variable annual increment of 2.5 to 3.5 per cent of basic salary for government employees depending upon their performance," he said, adding that for the armed forces, it has recommended a military allowance of Rs 1,000 to Rs 6,000 per month.

Hike in salaries for SC employees

"The same scheme of running pay bands and grade pay as being recommended for Central government employees is recommended for the Supreme Court employees," the commission, said.

All the posts in the Supreme Court that are presently in the scale of Rs 6,500-10,500 have been upgraded and placed in the scale of Rs 8,700-34,800 along with grade pay of Rs 4600, the report, submitted today to Finance Minister P Chidambaram, said.

The commission has recommended merger of the posts of Additional Registrar and Joint Registrar in the scale of Rs 18,400-22,400, which would be revised in the pay band of Rs 39,200-67,000 along with grade pay of Rs 9,000.

The sixth-pay commission also accepted the demand for grant of the scale of Rs 8,000-13,500 on completion of four years of service to all posts like Senior Judicial Assistants, Senior Personal Assistants, Readers, Senior Judicial Translators and court officers, which are presently in the pay scale of Rs 6,500-10,500.

The commission has recommended that these posts be extended the scale of Rs 8,000-13,500 corresponding to the revised pay of Rs 8,700-34,800 along with the grade pay of Rs 5,400.

The commission also recommended that the merger of posts like PPS to the Chief Justice, Chief Librarian and Assistant Editor in the pay scale of Rs 12,000-16,500 to be revised in the proposed scale of Rs 15,600-39,100 along with grade pay of Rs 6,600.

Special pay for armed forces

The pay commission recommended an up to two-fold increase in the salaries of defence personnel that would include a military service pay of up to Rs 6,000 a month and grade pay, apart from suggesting their direct entry into Central para-military forces.

"We have observed that government is spending on the training of these jawans (defence personnel), which are left on the street in their prime age at the age of 33-34. The lateral entry will provide them longer career and lesser burden on government," Srikrishna told reporters.

However, the panel made it clear that for the military service pay (MSP), the government will not have to pay any arrears.

In the officers category, it has recommended a pay scale of Rs 15,600-Rs 39,100 for lieutenant, along with a grade pay of Rs 5,400 and MSP of Rs 6,000 a month. Accordingly, the total revised monthly pay of Lieutenant, Sub-Lieutenant or Flying Officer will be Rs 25,760 to Rs 28,890.

The Major-General/Rear Admiral/Air Vice Marshal have been put in the pay scale of Rs 39,200-rs 67,000 besides a grade pay of Rs 9,000, but without any MSP. They will be getting a monthly salary of Rs 52,280-rs 54,480 as per the revised pay scales.

Further, it has recommended a direct entry in the Central para-military forces that will provide them a service for longer period and save the government of immediate pension burden.

"We have observed that government is spending on the training of these jawans, who are left on the street in their prime age of 33-34... The lateral entry will provide them a longer career," he said.


  • Cabinet Secretary salary raised to Rs 90,000, Secretary`s to Rs 80,000

  • Minimum entry level salary of Rs 6,660

  • Better performers to get 3.5% increment as against 2.5% normal hike

  • 45 lakh govt sector employees to benefit

  • 40% hike in salary of senior government employees

  • Substantial hike in salary of other govt employees

  • Govt to merge 50% DA with basic

  • Transport allowance to be 6% of basic for gazetted officers

  • Pay hike to cost Rs 13,000 to 16,000 crores to govt exchequer

  • Pay panel puts max govt salary at Rs 80,000 and min salary at Rs 6,660

  • 10-20% hike in HRA in Non A1 cities

  • Pension to be 50% of last pay

  • Pension revision after the age of 80, 90, 95, 100

  • New pay scale applicable from Jan 1, 2006

  • Recommends doubling of most incentive schemes

  • Recommendation for intensive scheme

  • Equal status to defence services

  • End of all gazetted leaves except three national holidays

  • Increase of maternity leave to six months

  • 5 working days a week

  • Total number of grades reduced to 20 against the prevailing 35

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    Latest 6th paycomission PAY SCALE

    Latest 6th paycomission PAY SCALE

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    6th pay commision Latest Report HIGHLIGHTS 2008-part3

    • All fixed allowances made inflation proof with provisions of automatic revision whenever
      dearness allowance payable on revised pay bands goes up by 50%. Transport
      Allowance to be increased every year on the basis of the increase in the dearness

    • Encashment of Earned Leave in case of Defence Forces personnel delinked from the
      number of years of service. All Defence Forces personnel to be eligible for leave
      encashment of upto 300 days at the time of retirement/discharge.

    • A new medical insurance scheme recommended for Government employees. The
      scheme to be optional for existing Central Government employees and pensioners. New
      Government employees and new pensioners to be compulsorily covered by the scheme.

    • Fitment formula recommended for serving employees to be extended in case of existing
      pensioners/family pensioners.

    • Rates of Constant Attendant Allowance for disabled pensioners to be increased by five
      times to Rs.3000 p.m.

    • Pension to be paid at 50% of the average emoluments/last pay drawn (whichever is more
      beneficial) without linking it to 33 years of qualifying service for grant of full pension.

    • A liberal severance package for employees leaving service between 15 to 20 years of

    • Higher rates of pension for retirees and family pensioners on attaining the age of 80, 85,
      90, 95 and 100 years.

    • Revision of the commutation table suggested for commutation of pension.

    • In case of Government employees dying in harness, family pension to be paid at
      enhanced rates for a period of 10 years.

    • Framing of an appropriate insurance scheme suggested for meeting the OPD needs of
      pensioners in non-CGHS areas.

    • A new mechanism for grant of advances under which an employee will take the advance
      from an approved bank and the Government will give an interest subsidy equal to two
      percentage points on the rate of interest being charged by the bank to the employee.
      Existing limits of various advances increased and provisions made for their automatic
      revision periodically.

    • Continuation of five day week. Government offices to remain closed only on the three
      national holidays. All other gazetted holidays to be abolished and compensated by
      increasing the number of restricted holidays from two to eight days in a year.

    • Benefits like staggered working hours, special leave for child care, enhanced maternity
      leave of 180 days, better accommodation facilities in the form of working women’s
      hostels, etc. specifically for women employees.

    • Government employees with disabilities recommended various benefits like enhanced
      number of casual leave, special aids and appliances for facilitating office work, higher
      interest subsidy for automobile loans, liberal flexi hours, higher rate of transport
      allowance, better prosthetic aids and proper grievance redressal machinery. Extra
      allowance for disabled women employees to take care of young child till the time the child
      attains the age of two years.

    • Lateral movement of all Defence Forces personnel (both Personnel Below Officer Ranks
      & Short Service Commission Officers) at appropriate levels in Central Police
      Organizations/Central Para Military Forces as well as to the various posts of defence
      civilians in Ministry of Defence.

    • Steps leading to improvement in the existing delivery mechanisms by more delegation,
      delayering and an emphasis on achieving quantifiable and concrete end results.
      Emphasis to be on outcomes rather than processes.

    • Greater emphasis on field offices/organisation at the cutting edge of delivery.

    • Enhanced pay scales for Nurses, Teachers, Constabulary and Postmen with whom the
      common citizen has most frequent interaction. Forest Guards also to get higher pay

    • Better deal for training academies.

    • Normal replacement pay band, grade pay and allowances for the existing Members of
      regulatory bodies. A revised method of selection with a higher pay package to those
      recruited through the revised process of selection in selected organisations.

    • All the recommendations to be treated as an organic whole as partial implementation will
      bring in several anomalies and inconsistencies.

    • The recommendations contained in the Report to cost Rs.12,561 crore in the year 2008-
      09. Savings of Rs.4,586 crore likely to accrue on account of various measures
      suggested in the Report. The net financial implications of the recommendations
      contained in the Report estimated to be Rs.7,975 crore for the year 2008-09. An
      additional, one-time burden of Rs.18,060 crore on payment of arrears.

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    6th pay commision Latest Report HIGHLIGHTS 2008-part2

    • Defence Forces given running pay bands and grade pay on par with those recommended
      for civilians.

    • In addition, Military Service Pay for al personnel of Defence Forces till the rank of
      Brigadier/equivalent @ Rs. 6000 p.m.for officers, Rs.4200 p.m. for Military Nursing
      Service officers and Rs. 1000 p.m. for Personnel Below Officer Ranks. The Military
      Service Pay to count for all purposes excluding increments.

    • Director General (Armed Force Medical Services) placed in the Apex grade of Rs.

    • In Defence Forces, only two trade groups to be retained for Personnel Below Officer
      Ranks with the earlier trade groups Y and Z being merged. The personnel in trade group
      X to have an additional X Group Pay of Rs. 1400 per month.

    • Certain posts in Senior Administrative Grade (SAG) and Higher Administrative Grade
      (HAG) requiring technical or specialized expertise and not encadred in any of the
      services to be opened up for being filled by suitable officers within the Government as
      well as by outsiders on contract. Shift from career based to post based selection in the
      higher echelons of Government in order to get the best domain based expertise

    • Creation of additional posts in Senior Administrative Grade/equivalent/ higher grades in
      future to be strictly on functional considerations with such posts invariably being created
      outside the cadre to be filled by method of open selection including contractual
      appointment from within or outside the Government.

    • Introduction of Performance Related Incentive Scheme (PRIS) in the Government under
      which employees to be eligible for pecuniary remuneration over and above the pay.
      PRIS to replace ad-hoc bonus scheme immediately and eventually replace Productivity
      Linked Bonus. PRIS to be budget neutral.

    • System put in place for giving market driven compensation package to young scientists
      and posts requiring special expertise and professional skills.

    • Parity established between Field and Secretariat Offices

    • The Secretariat and Stenographers cadres to stand merged in future. All future
      recruitment in Secretariat to be made as Executive Assistants with minimum
      qualifications of Graduation and one year Diploma in Computers. Executive Assistants to
      discharge the functions presently being carried out by Assistants as well as the Private

    • Scale of Rs.26,000 (fixed) corresponding to the revised pay scale of Rs.80,000 (fixed).

    • Base year of the Consumer Price Index (CPI) for computation of dearness allowance to
      be revised as frequently as feasible. Formulation of a separate CPI for Government
      employees by National Statistical Commission for computation of dearness allowance

    • Existing rates of most of the allowances to be doubled both in case of Defence Forces as
      well as civilian employees.

    • Existing rate of HRA to be retained for A-1 cities. A, B-1 & B-2 cities to be given this
      allowance at the higher rate of 20%. C and Unclassified cities to be given the allowance
      at the higher rate of 10%.

    • CCA to be subsumed in Transport Allowance and the rates of this allowance to be
      increased by 4 times.

    • Travel entitlements to be paid on actuals.

    • Reimbursement of education allowance to be raised from existing Rs.50 to Rs.1000 per
      child per month, subject to the maximum of two children. Hostel subsidy to be raised
      from existing Rs.300 p.m. to Rs.3000 p.m.

    • Risk allowance to be replaced by risk insurance.

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    6th pay commision Report HIGHLIGHTS 2008-part1

    • Implementation of the revised pay scales from January 1, 2006.Recommendations
      relating to allowances to be implemented prospectively.

    • To remove stagnation, introduction of running pay bands for all posts in the Government
      presently existing in scales below that of Rs.26,000 (fixed).

    • Four distinct running pay bands being recommended - one running band each for all
      categories of employees in groups ‘B’ and ‘C’ with 2 running pay bands for Group A

    • The posts of Secretary to Government of India/equivalent and Cabinet
      Secretary/equivalent to be kept in distinct pay scales.

    • A separate running pay band, designated as -1S scale, is not to be counted for any
      purpose as no future recruitment is to be made in this grade and all the present Group D
      employees not possessing the prescribed qualifications are to be upgraded and placed in
      the Group ‘C’ running pay band PB-1 after they are suitably retrained. Group D
      employees possessing the minimum prescribed qualifications to be placed in PB-1 pay
      band straightaway.

    • Minimum salary at the entry level of PB-1 pay band to be Rs.6660 (Rs.4860 as pay in the
      pay band plus Rs.1800 as grade pay). Maximum salary at the level of
      Secretary/equivalent to be Rs.80000. The minimum: maximum ratio 1:12.

    • Every post, barring that of Secretary/equivalent and Cabinet Secretary/equivalent to have
      a distinct grade pay attached to it. Grade pay (being a fixed amount attached to each
      post in the hierarchy) to determine the status of a post with a senior post being given
      higher grade pay.

    • The total number of grades reduced to 20 spread across four distinct running pay bands;
      one Apex Scale and another grade for the post of Cabinet Secretary/equivalent as
      against 35 standard pay scales existing earlier.

    • At the time of promotion from one post to another, the grade pay attached to posts in
      different levels within the same running pay band to change. Additionally, increase in
      form of one increment to be given at the time of promotion. A person stagnating at the
      maximum of any pay band for more than one year continuously to be placed in the
      immediate next higher pay band without any change in the grade pay.

    • Annual increments to be paid in form of two and half percent of the total of pay in the Pay
      Band and the corresponding grade pay. The date of annual increments, in all cases, to
      be first of July. Employees completing six months and above in the scale as on July 1 to
      be eligible.

    • Another form of variable increments for Group A Pay Band PB-3, where annual
      increments in the band will vary depending upon the performance. Eighty percent or
      more employees in the grade to be allowed normal increment at the rate of 2.5% with the
      high performers (not exceeding 20 percent) during the year being allowed increment at
      the higher rate of 3.5%. Government advised to extend the scheme of variable
      increments in running pay bands PB 1 and PB 2.

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    6th pay commission scales up to 40 pc pay hike for top officials

    Government employees are in celebratory mode as the Sixth Pay Commission has handed over its report to the Finance Ministry on Monday. A major hike has been announced for Government servants across the board.

    The Government will incur a one-time burden of Rs 18,060 crore on payment of arrears in the event of the report being accepted with the salary increase of 77 per cent for the starting level employees.

    The hike would be effective from January 1, 2006 as per the prevailing practice.

    The maximum salary of Government employees will be Rs 80,000 per month while the minimum salary will be Rs 6,600 per month.

    The Commission has reportedly recommended a hike of over 40 per cent in salaries of Government employees at the senior level and substantial salary hike in other categories as well.

    As widely speculated, the Commission is silent on the retirement age for government workers.

    The existing HRA rate has been retained for A-1 cities while it is higher by 20 per cent for A, B-1 and B-2 cities. For C and unclassified cities the allowance is higher by 10 per cent.

    The report recommends that CCA be subsumed in Transport Allowance, and the rate be increased by four times. In other changes, travel is to be paid on actuals.

    The Finance Ministry will consider the report and will submit its recommendations to the Union Cabinet.

    With general elections round the corner, the Government is likely to accept the recommendations without any cut.

    The Commission - the arbitrator in the collective bargaining process between labour and the largest employer in the country, the Central Government - however, faces challenges that seem staggering.

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    Hot News Sixth Pay Commission Report submitted to Finance Minister

    Breaking News! Justice Srikrishna has submitted the much-awaited sixth Pay Commission report to Finance Minister P Chidambaram. According to media reports, Justice B. N. Srikrishna has recommended over 40 percent hike in the basic salary for the government employees at the senior level.

    There will be a substantial hike for government employees in other categories as well. The hike may take effect from the earlier date of January 01, 2006. That means, all government employees will get huge bonanza in terms of arrears.

    While the report suggested that DA (Dearness Allowances) to be hiked to 14% of basic pay, HRA in Mumbai, Delhi will remain unchanged at 30% of the basic salary. The government has also decided to merge 50 per cent of the Dearness Allowances (DA) in the basic pay of its employees. The Pay Commission report will benefit 55 lakh Central Government employee, which might the cost the government Rs.13,000 - Rs. 16,000 crore per annum. The commission was set up by government in 2006.

    We just received the latest update on some of the important recommendations in the sixth Pay Commission report.
    Here are those key features:

    1) Lowest Scale - Rs. 6,600/
    2) Education Allowances for employees having two children - Rs. 1,000/ (Earlier, it was Rs. 100/)
    3) Highest Salary - Rs. 90,000/ (Cabinet Secretary)
    4) National Holidays - 3
    5) Gazetted Holidays to be cancelled
    6) Pay hike will be implemented from January 01, 2006
    7) Maternity Leaves: 6 Months
    8) Employees living in A-1 Cities - 30% HRA (Unchanged)
    9) Employees living in A, B, B-1 Cities - 20% HRA
    10) Incentive Schemes will be announced
    11) New Medical Insurance Scheme to be launched for government employees
    12) Market-driven pay for scientists and all other jobs that require professional skill set.
    13) Total number of grades to be reduced from 30 to 20.

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    Central government salaries and pension costs to rise by 300 billion rupees

    A much-anticipated increase in salaries for government employees will threaten India’s drive to consolidate its public finances and make a near-term cut in interest rates difficult, Morgan Stanley said on Monday.

    The Sixth Pay Commission for government workers submitted its report to the finance minister on Monday but details are yet to be announced.

    Morgan Stanley economists said in a research note they expected central government salaries and pension costs to rise by 300 billion rupees ($7.4 billion or 0.4 percent of gross domestic product) to 1.307 trillion rupees (2.5 percent of GDP) in the 2008/09 year.

    Chetan Ahya, Tanvee Gupta and Sumeet Kariwala said this would be a 30 percent year-on-year increase in salary and pension costs for some 2.9 million central government workers.

    They said the increase was likely to make state governments, with 7.2 million employees, and quasi-government agencies follow suit.

    They estimated the combined wage and pension cost increase for central and state governments and quasi-government organisations would be 1.4-1.5 trillion rupees spread over the next three years.

    "The combined effect of the pay hike and the recent farm loan relief spending of 600 billion rupees or 1.2 percent of GDP will decidedly reverse the six-year trend of reduction in government deficit," they said.

    Such an expansionary fiscal policy would affect the central bank’s ability to cut rates in the near term and a higher fiscal burden would come at a time when capital inflows may slow, potentially pushing up longer-term bond yields and steepening the yield curve.

    On the positive side, the pay hike was likely to result in more discretionary and staple consumption, they wrote.

    But discretionary spending was likely to face headwinds from tight monetary policy and public sector earnings could be negatively affected due to rising long bond yields and losses in treasury portfolios, they said.

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    Upto 77% Wage increase expected in Sixth Pay Commission

    Recommendations by pay panel for salary increases for Union government workers will cost 125.61 billion rupees ($3.1 billion) in the fiscal year 2008/09, the panel’s report posted on a government Web site said.

    Back-dated pay would cost a one-time 180.60 billion rupees and the panel recommended a salary increase of 77 percent for the lowest rung of central government workers.

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    Pay Commission to revise transport allowance

    The Sixth Pay Commission is set to announce a hike of up to 52% for Central government staff and officers, along with their counterparts in defence and paramilitary forces.

    The commission is also likely to revise the transport allowance (conveyance), which is a maximum of only Rs 800 in A1 cities now.

    ’’Those driving to office in their own cars could be a happier now," pay commission sources said.

    Officials are also awaiting the new shape of Children’s Educational Assistance, which is currently a measly Rs 40 every month per child (Classes I to X) and Rs 50 (Classes XI and XII), although it is Rs 100 per month for special (challenged) children.

    Another ’’anomaly" which the panel might address is the daily allowance an official gets while on tour.

    The highest such allowance at present is Rs 260 per day (for ordinary lodging) and Rs 650 (for hotel lodging).

    This means that the maximum an officer can at present spend every day on his hotel accommodation, food and local conveyance is Rs 650 even when, say, he is on a tour of Mumbai. This regime often forces officers to make ’’alternative" arrangements.

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    Upto 35% Wage increase expected in Sixth Pay Commission, CNBC Reports

    CNBC Awaaz reported recently that there may be an increase of 30 - 35 %
    in wages of employees in Sixth Pay Commission. If this happens, it will
    be a great news for the middle class in India. Main tax payers in the
    country are salaried employees. So giving benefit to a common man will
    help the Congress government to get more votes in upcoming elections. I expect the
    Finance Minister to pass the recommendations of salary revision from
    Sixth Pay commission panel.

    I just wanted to share some basic concepts about the pay commission. There may be certain things which many of us may not be aware of. Sixth Pay Commission is an administrative group of members of the Union Cabinet of India for increasing the salaries of government employees.

    Everyone is now waiting for the government to announce the 6TH Pay Commission 2008 proposed pay scales. Looking for more Sixth Pay Commission News and Pay structure for 2008.

    5.5 Million government employees will be directly benefit from the Sixth Pay Commission. It may result in wage increase in private sectors as well. Also, it will prompt state governments to extend benefits to their employees. Sixth pay commission pay scales may help employees to fight with the ever increasing inflation.

    The first pay commission was constituted in May 1946, which submitted its report within 12-months. The second panel had been set up in August 1957, which submitted its report after two years. The financial impact of the second pay commission was Rs 396 million.

    The third pay commission, which was established during April 1970 gave its report in March 1973, and formed plans, which cost the government Rs 1.44 billion.

    The fourth commission that constituted in June 1983 submitted its report in three different stages within four years and the financial burden to the government was Rs 12.82 billion.

    The Fifth Pay Commission, constituted during Narasimha Rao’s regime in 1994, was executed in 1997 at a cost of Rs 17,000 crore.

    In July 2006, the Cabinet sanctioned setting up of the sixth pay commission. According to it, the cost of increase in salaries is projected to be around Rs 20,000 crore for a total of 5.5 million government employees.

    The report on Sixth Pay Commission, formed by the Union Cabinet, chaired by Prime Minister Manmohan Singh, would be ’beneficial’ for the employees as government is desperate to offer complete salary packages to attract quality human resource.

    Ajay Maken, Union Minister for Urban Development (State) said, “The Sixth Pay Commission report will be good for the employees. We do not want efficient employees to leave government services to join the private sector.”

    The Sixth Pay Commission, likely to submit its report by early April, would give recommendations regarding the pay structure of government employees comprising industrial as well as non- industrial central government employees, all-India services, armed forces personnel and employees in the Union

    Territories. Additinally, the commission would examine the pay structure for Indian audit and ac-counts department, regulatory bodies set up by Acts in Parliament and Supreme Court employees. Sixth pay commission pay structure will help decide the pay structure for various private sector employees as well.

    The expected pay scale table for Sixth Pay commission will also offer pending arrears to employees.

    “The Sixth Pay Commission will have a multiplier effect in the economy; those salaries that are benchmarked against central government will also increase. The relativities are disturbed” a senior government functionary said.

    For the railways, out of the Rs 5,000 crore allocated, Rs 500 crore is for pension and the remaining Rs 4,500 crore for salaries, wages and other allowances. For a staff strength of 14 lakh, therefore, the additional Rs 4,500 crore expenditure amounts to an average monthly hike of over Rs 2,000 irrespective of the various grades of employees and officers.

    6TH Pay Commission Pay Scale Table should be released in first week of April. I will also request TopNews Media to keep us updated with the Sixth central pay commission latest news and expected central 6th Pay Commission Scales.

    As the government announced many good things for Farmers and Tax Payers in its Election Budget, i hope the Sixth Pay commission report will also recommend a decent rise in pay scales for central government employees.

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    Sixth Pay Commission Report: What will employees get on April 4, 2008

    The government has declared that the Sixth Pay Commission would submit its report by April 4, 2008. In a written reply to the Rajya Sabha, Mr. P K Bansal, the Minister of State for Finance said, “The Commission is to finalise and submit its report within 18 months of its constitution, that is 4th April, 2008.”

    About effectuation of the Pay Commission’s suggestions, Mr. Bansal stated, “Since the report is to be submitted, the time frame for its implementation cannot be stated.”

    Regarding the terms of reference of the Sixth Pay Commission, he said that the Commission was analyzing the interest and requirement to approve any interim relief until its commendations were completed.

    Employees can expect a decent rise in salary as the Elections are coming near. Government may not miss this chance to give additional benefits to employees in all pay scales to grab a bigger vote bank. The salary increase in Sixth Pay commission report 2008 may bring cheer among various government departments.

    The new 6th pay commission pay scale table may also result in increase in salary for employees in private sector. Big companies are paying well but there are still many workers in small companies who are finding it very difficult to run their house on meagre income.

    On media reports regarding big increase in salaries of civil service staff, Mr. Bansal told that the Commission is yet to settle down and present its report, so the media might be doubtful.

    In October 2006, the Sixth Pay Commission was formed to suggest comprehensive changes in salary structure of the government employees.

    It would also provide suggestions regarding the pay arrangement of government workers including industrial as well as non- industrial central government employees, Armed Forces personnel, All India Services, and employees in the Union Territories.

    Additionally, the Commission would study the pay structure for Indian Audit and Accounts Department, regulatory bodies establish by Act s in the Parliament and Supreme Court employees, Mr. Bansal said.

    Central 6th pay commission scales may trigger state governments to offer salary hike to their employees. The expectations are higher and things may be clear by April 4, when the expected pay scale tables 2008 under VIth pay commission will be unveiled.

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    40% hike in basic salary & rise in retirement age to 62 expected in Budget

    The Sixth Pay Commission’s recommendations are expected to result in a hike of 30-40% in basic salary of central government employees in various categories. In the current fiscal, the outgo on account of pay and allowances for the government - with an employee strength of over 3 lakh - has been pegged at Rs 46,379 crore.

    Sources said the recommendations could also include increase in the retirement age of government employees to 62 years from 60. The commission had called senior bureaucrats to give a presentation. A hike in retirement age would help the government in postponing its pension liabilities by two years. However, a final decision on this would be taken at the highest political level. The government had last raised the retirement age in 1998 to 60 from 58 years when the Fifth Pay Commission recommendations were accepted.

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    Pay panel estimates 150% civil service salary hike

    Government salaries may literally give India Inc a run for its money, if one of the latest estimates of salary revisions by the Sixth Pay Commission is to be believed. Basic salaries are likely to rise by over 150%. However, the actual payout may be more moderated, as inclusive of all allowances, existing salaries are not far below the new slabs.

    Section officers will get a starting basic salary of Rs 20,000, while their department heads, joint secretaries, would get a fixed basic salary of Rs 60,000 a month. Basic pay for section officers currently begins at Rs 8,000 a month.

    Secretaries to the government would earn a fixed salary of Rs 75,000 a month. A cabinet secretary’s monthly salary would also be fixed at Rs 80,000. At each grade, the 5.5 million central government employees would earn an inflation-neutralising dearness allowance (DA) of 6% of basic. The minimum scale for non-executives is likely to be hiked to Rs 6,500 a month, from the present Rs 2,550 a month.

    The buzz around the Sixth Pay Commission has grown louder with the panel headed by Justice BN Srikrishna expected to submit its report next week. The good news, however, may just stop here. Contrary to expectations, government officials will continue to retire at 60 years. The plan to increase the retirement age has been shelved, according to the Pay Commission estimates, a copy of which is with FE. The Commission, though, is expected to recommend that officials will now retire on December 31 of the year they reach age 60.

    Other allowances-including DA, house rent and travel benefits, linked to basic pay-would also increase. DA would be hiked by 6% retrospectively from January 1, 2007 and 14% from this year, according to this estimate. House rent is proposed to be hiked by 30% of basic for metros, but with a cap of Rs 12,000. While the recommendations are effective from January 1, 2006, arrears would be given only from January 1, 2007.

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    Pay panel report soon, Govt working on 20% hike

    As the Sixth Pay Commission prepares to submit its report on March 20, a fortnight before deadline, the Finance Ministry has started working its numbers considering an average 20% increase in salaries of Central government employees.

    The wage hike, after merging existing allowances with the basic salary, will range from 18 to 25% depending on the slab, sources told The Indian Express. The net impact will be 20%, they added.

    Compared to the 200% hike recommended by the Fifth Pay Commission, the increase this time has been deliberately kept at a moderate level as the inflationary impact is anyways being neutralised since July 1996 through revisions in the Dearness Allowance.

    These revisions, twice every year from January 1 and July 1, are in line with the formula advocated by the Fifth Pay Commission. A Central government employee’s remuneration includes a basic salary, a 50% dearness pay merged with the basic and a 47% dearness allowance of the total.

    Excluding the arrears that would accrue to the 55 lakh employees, the annual impact of the new wage jump is estimated at Rs 11,000 crore. The new scale will be effective from January 2006 but half of it could be compulsorily put away under the GPF to bring down the instant payout.

    That is because although Finance Minister P Chidambaram provided for Rs 26,657 crore or 0.5% of the fiscal deficit as headroom for pay revision and arrears, the margin got reduced due to a supplementary demand for Rs 10,000 crore for the loan waiver of farmers.
    Using the average wage hike of 20%, the Finance Ministry has estimated that its impact on states will be to the tune of Rs 46,000 crore.
    Source : Express India

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    Grand pay hike for Govt employees on the cards


    The government is well and truly in election mode. The Sixth Pay Commission has reportedly recommended hikes of up to 33 per cent in the salaries of Central Government employees and, as announced in the Budget, the report will be out within the next three weeks.

    The wait is almost over for the Government of India employees. CNN-IBN has learnt that the Sixth Pay Commission is close to finalising its recommendations and a windfall is on the cards for employees.

    According to sources:

    Salaries are expected to increase by 25 to 33 per cent across the board

    The hike will take place with retrospective effect from January 1, 2006

    However there is no scope for any interim relief till the recommendations are implemented.

    The recommendations come at a time when the government is already burdened with a huge farm loan waiver and other schemes benefiting the social sector. But fears of pressure on the treasury are countered by the larger-than-expected tax collections and an improving fiscal deficit.

    But some voices feel the government may need a few years to absorb the financial impact as had happened during the Fifth Pay Commission. While the railways have made some provisions for the pay hike in their Budget, the government may seek grants in Parliament.

    Based on 2007-08 figures, the government may have to shell out an extra Rs 13,000 crore for salaries, while arrears may cost up to Rs 40,000 crore, and may need to be paid in installments.

    State governments are not obliged to match the pay scales set by the Centre but with the state-Centre wage gap widening, the states may have no option but try and match up to the Centre’s bonanza.


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    New Pension Scheme (NPS) is out of the terms of reference for the Sixth Pay Commission

    And if the provision for railway employees is an indication (Rs 5,000 crore for 14 lakh em-ployees), government employees may be in for a 20%-25% hike. In the current fiscal, the outgo on account of pay and allowances for the government is being estimated at Rs 46,379 crore. However, if one factors in the arrears and pensions with retrospective effect from January 1, 2006, the actual impact could be as high as three times this figure, experts say.

    Assuming that the Pay Commis-sion report is implemented by August this year (once it is submitted in March), the government will have to account for arrears with effect from January 1, 2006.

    The pay hikes could also trigger revisions in pay scales for other sec-tors like school teachers and universities. The changes in pay scales of these categories will, however, not reflect in the Budget outlays as it would be provided through grants.

    Add to this state governments’ li-ability, which will be about Rs 21,285 crore, roughly one and a half times the size of central government’s liability. While state govern-ments are not liable to adopt the recommendations, pressure will be on them to factor in similar increases for their employees.

    “The Sixth Pay Commission will have a multiplier effect in the econ-omy; those salaries that are benchmarked against central government will also increase. The relativities are disturbed,” a senior government functionary said.

    For the railways, of the Rs 5,000 crore allocated, Rs 500 crore is for pension and the remaining Rs 4,500 crore for salaries, wages and other allowances. For a staff strength of 14 lakh, therefore, the addi-tional Rs 4,500 crore expenditure amounts to an average monthly hike of over Rs 2,000 irrespective of the various grades of employees and officers.

    Usually, a central government employee’s total remuneration includes a basic salary, a 51% dearness pay merged with basic and a 41% dearness allowance of the total.

    While 90% of the railways are constituted by grades III and IV em-ployees, a similar proportion is true for the remaining set of central government employees. For the civilian departments, the percentage of employees in the higher grades are more, however, this is offset by the fact that in defence, majority of the employees are in the Group D category.

    Experts feel that the figures look too low than what was anticipated. But a few feel that the final figure may be moderated because unlike the Fifth Pay Commission, salaries since then have been 100% neu-tralised to the Consumer Price Index (CPI). Therefore, the increases may not be that drastic. Prior to that, for the extent of neutralisation to the CPI was about 75% for the lower grades.

    The New Pension Scheme (NPS) is out of the terms of reference for the Sixth Pay Commission, lest political opposition influence defined benefit as against the defined contribution system prescribed in the NPS.
    The 40 lakh government employees include those in the armed forces, not taking into account the various grades. Currently, civilian posts in the central government are classified into four groups (A, B, C and D) with reference to their scales of pay.

    The Sixth Pay Commission was constituted in October 2006 to rec-ommend comprehensive changes in salary structure of the govern-ment employees. It would give recommendations concerning the pay structure of government employees comprising industrial and non- industrial central government employees, all-India services, armed forces personnel and employees in the Union Territories. Besides, the commission would examine the pay structure for Indian audit and ac-counts department, regulatory bodies set up by Acts in Parliament and Supreme Court employees.

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    The Telegraph reports 25% hike(0nly)

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    Sixth Pay Commission impact may top Rs 20,000 crore

    The impact of the impending Sixth Pay Commission recommendations is expected to be within 0.4 per cent of Gross Domestic Product (GDP), according to Finance Secretary D Subbarao.
    The fifth Pay Commission award of 1996 had translated into an impact of 0.4 per cent of GDP then. “I do not expect it to be higher than that level this time,” Subbarao told Business Standard.
    Given that the Budget has projected GDP at Rs 53,03,770 crore in 2008-09, the impact of the award may well be Rs 21,215 crore.
    Subbarao added he expects the economy to grow faster than the government’s ballpark estimates of a real GDP growth rate of 8.5 per cent, and annual inflation rate to be 4.5 per cent, in 2008-09.
    On the question of off-Budget liabilities, the finance secretary said the Budget had acknowledged them for the first time, bringing greater transparency to the numbers.
    On his part, Revenue Secretary P V Bhide said it was not possible to simultaneously increase the income tax exemption limit as well as the deduction limit under section 80C. “We cannot satisfy everyone”, he said.
    Bhide also said that despite the higher exemption limit, it would not take much time for those people who go out of the tax net to come back into the net, as salaries are rising 15 to 20 per cent annually. “If not this year, they will come back again as they cross the threshold limit,” he said.

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    Bureaucrats may get stints in India Inc

    Pay panel likely to suggest institutionalising this practice.
    Bureaucrats may be allowed to serve significant stints outside of government in private sector companies to allow mid-career officers to pick up new skills and build a nest-egg as a bonus.
    Government officials suggest the Sixth Pay Commission is likely to recommend that this practice be institutionalised in administrative rules.
    Currently, civil servants can go on deputation to various multilateral bodies and non-governmental agencies in India and abroad. They can also take extended time off after putting in a minimum number of years in service for further studies subject to government approval.
    Officials said private sector stints could also be considered some sort of compensation, since government salaries will continue to lag private sector compensation despite the Sixth Pay Commission award due March 31.
    This will be particularly true for senior government servants whose salaries cannot be pegged to the massive compensation paid to private sector executives in comparable positions. “The impact of the award is likely to be felt more at the lower levels of bureaucracy than the highest levels,” officials said.
    In reply to a Commission questionnaire, the Indian Administrative and Civil Service (Central) Association has demanded pay scales at market rates.
    The Sixth Pay Commission was constituted last year by the United Progressive Alliance government and is chaired by Justice B N Srikrishna.
    The central government is preparing for a fiscal impact of around Rs 21,000 crore on account of the award, though the likely expenditure has not been provided for in the Budget.

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    Sell PSUs to meet Sixth Pay Commission implementation cost?

    Finance minister P Chidambaram proposes to meet rising wage cost of government employees after the Sixth Pay Commission from the proceeds of disinvestment in state-run companies.

    There is great scope for stake sales in public sector companies, the finance minister said, adding that the central budget had factored in possible wage increases for government employees, once the pay commission submits its recommendations.

    The finance minister, during his budget speech, had also spoken about listing all public sector undertakings. However, the chances of the government moving ahead look remote given the negative impact it would have on votes.

    Prime minister Manmohan Singh also supported the view as he too sees no other way of raising money for the UPA government’s pet programmes like loan waiver.

    Economists say the 2008-09 budget is storing up public finance problems for the future, with its Rs60,000 crore loan write-off for farmers and no provision for a potentially huge increase in employee salaries.

    Economists also said details on how the massive debt write-off would function were conspicuous by their absence, and the impact of this, along with the pay rise for government workers and rising food and fertiliser subsidies, would widen the fiscal gap.

    "What is hidden is more important than what is revealed," M Govinda Rao, a member of the prime minister’s Economic Advisory Council, told a meeting of economists this week.

    He said the burden would fall on the next government. Whichever party comes to power after the elections next year will be a loser on the fiscal front, Rao said.

    According to the government, the centre’s fiscal deficit will fall to 2.5 per cent of gross domestic product in fiscal 2008-09, which starts on April 1, from an estimated 3.1 per cent this year.

    But that does not take into account the Rs60,000 crore proposed to be written off.

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    Cabinet looks into 6% DA for central staff

    Within a week of a pro-people budget, the government has more to offer - 6 per cent increase in dearness allowance to Central government employees and interest subsidy on loans to the farmers. This is likely to come up before the Cabinet on Friday.

    The move means that dearness allowance in the salary package of thousands of Central government employees would increase from 41 per cent to 47 per cent.

    Just last September, the government had increased dearness allowance from 35 per cent to 41 per cent.

    For the government, the 6 per cent hike would mean an additional burden of over Rs 1,500 crore on the exchequer. The allowance would be applicable from January 1, 2008, and would benefit over one crore Central government employees.

    And let us wait for the Sixth pay commission report

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    No Interim Relief for Central Govt. Staff

    Finally it is clear that there will not be any Interim Relief (IR) to the government employees.

    The Sixth Central Pay Commission does not intend awarding an Interim hike (IR) in salaries of Central Government Employees, Finance Minister P. Chidambaram told the Rajya Sabha today (14/08/2007).

    In a written reply, Chidambaram said that the commission has informed the Government that it expects to submit its final report within the stipulated date of April 4, 2008.

    No interim report has therefore been contemplated.

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    CPC report on 31 March 2008

    Sixth Pay Commission will submit its report on 31st March 2008 as stated by Finance Minister P. Chidambaram in his Budget speech. He hoped that the pay commission report will fulfill the expactations of lacs of Central Government Employees.

    He also proposed to change the Income Tax rate in view of the Sixth Pay Commission report. It will also benfit the employees. New rate of tax slabs are as follows:

    1. 0 - 1.50 lac : Nill Tax (1.80 lac for woman)
    2. 1.50 lac (1.80 lac for woman) to 3.00 lac : 10%
    3. 3.00 lac to 5.00 lac : 20%
    4. 5.00 and above : 30%

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    New Pay Scales recommended by Sixth Pay Commission chart


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