The much awaited recommendations of Seventh Pay Commission will be submitted to the Finance Minister Arun Jaitley on Thursday and the salary hikes proposed by the commission are likely to be implemented from 1 January 2016.
Here are a few of the likely recommendations from the commission:
1) The Seventh Pay Commission, headed by Justice A K Mathur, is likely to recommend a 15% hike in basic salaries of Central government employees and pensioners, which will be much lower than the 35% recommended by the Sixth Pay commission in 2008.
2) Overall, employees are likely to see an increase of 22-23% in their salaries due to a hike in dearness allowance (DA), sources close to the developments told PTI.
3) The Commission is also expected to propose an increase in house rent allowance (HRA).
4) However, the Seventh Pay Commission is unlikely to suggest any changes to the retirement age of central government employees, which is currently 60 years.
5) The 7th Pay Commission's recommendations are keenly awaited by many companies in various industries, as the salary hike proposals are expected to boost consumption and lead to an increase in sales.
6) Any hike above the expected increase in salaries is likely to boost the domestic stock markets, as it could lead to further improvement in consumption, resulting in increased revenues for the companies.
7) The recommendations will increase the government's annual salary expenditure and could result in pushing the consumer prices further up. The Union Finance Ministry estimates the Central government's expenditure on employees' salaries to rise by nearly 16% to Rs 1.16 lakh crore in the financial year 2016-17 upon the implementation of the commission's recommendations.