Central government employees are likely to get their revised salaries based on the recommendations made by the 7th Central Pay Commission (CPC) by August this year.
A decision is expected to be taken on June 11 when the empowered committee headed by cabinet secretary P K Sinha meets to discuss the subject.
"Central government employees could get the revised pay scales with their July salaries that would be credited on Aug. 1," the Financial Express quoted finance ministry sources as saying.
The commission had suggested an average hike of 23.5 percent in pay and allowances for about 47 lakh central government employees and 52 lakh pensioners with retrospective effect from January this year.
The Narendra Modi government allocated Rs. 70,000 crore in this year's budget for implementing the proposals, the full-year impact of which has been estimated at about Rs. 1.02 lakh crore in 2016-17.
The implementation of the 7th CPC recommendations is being seen as a double-edged sword. While consumption is expected to get a fillip and in turn spur growth, the government's finances are bound to come under strain with the full implementation, leaving less money in its hands to spend on infrastructure.
In its latest monetary policy statement released on Tuesday, the Reserve Bank of India (RBI) had listed the 7th CPC recommendations as one of the three risks for inflation.
"...there are upside risks â€“ firming international commodity prices, particularly of crude oil; the implementation of the 7th Central Pay Commission awards which will have to be factored into projections as soon as clarity on implementation emerges; the upturn in inflation expectations of households and of corporates; and the stickiness in inflation excluding food and fuel," it said.