Indian parliament
Central government employees can expect to get the enhanced allowances by November this year when the special committee to examine the proposals submits its report. In Picture: A view of the Indian parliament building is seen in New Delhi July 21, 2008 (Representational image).Reuters file

The BJP-led NDA government is likely to take a decision about the hike in allowances for Central government employees by November this year when the panel appointed to examine it submits its report.

The committee headed by finance secretary has secretaries from home affairs, defence, health and family welfare as its members; the first meeting of the committee that was constituted on July 22 was held on August 4.

The information was given by finance minister Arun Jaitley to the Rajya Sabha on Tuesday in response to a question pertaining to the pay commission.

The hike in the salary component as recommended by the 7th Central Pay Commission (CPC) was accepted with retrospective effect from January 1, 2016. The arrears have been paid to the 47 lakh employees while 52 lakh pensioners are expected to get their arrears in due course.

A study by Tata Strategic Management Group had estimated the quantum of allowances at Rs. 34,000 crore. This could change if the committee differs from the hike proposed by the 7th CPC.

The committee has been asked to submit its report within four months. Therefore, a decision on increased allowances for about 1 crore employees and pensioners can be expected by November. 

While approving the recommendations of the 7th CPC, the government has said in an official statement on June 29 that the committee to examine the allowances will submit its report in a time-bound manner.

The pay commission had recommended abolition of 51 allowances and subsuming 37 others after examining 196 allowances. 

"Given the significant changes in the existing provisions for Allowances which may have wide ranging implications, the Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on Allowances. The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates," the statement said.

The Union Cabinet also decided to appoint two separate committees to examine implementation of pension under the National Pension Systems (NPS) and discrepancies/anomalies that could stem from implementing the 7th CPC.

The recommendations of the 7th CPC cover 47 lakh Central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.