Almost 25 days after the issuance of the notification regarding arrears payable to retired Central government employees, pensioners got their revised pay on August 30 along with the overdue amount for the period January to July.
There are about 53 lakh pensioners, including those who retired from the armed forces. The notification about arrears was issued on August 4 by the Central government.
The outgo on account of salary arrears for pensioners and about 47 lakh Central government employees was estimated at Rs. 34,600 crore by ratings agency India Ratings and Research Pvt Ltd. (Ind-Ra). "The combined outgo for the centre on account of arrears for January to July and payments for August will total to Rs. 346 bn (Rs. 34,600 crore)," Ind-Ra had said on August 17.
The hike accepted and paid by the Central government pertains only to the salary component, while a decision on allowances is pending scrutiny by an official panel, which is expected to submit its report by November.
"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 report within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates," the June 29 statement said.
The payment of arrears coinciding with the festival season is being seen as driving consumption of goods and services, which in turn, could boost economic growth in the forthcoming quarters.
Sectors such as bullion, automobile, real estate, consumer durables and travel and hospitality are being seen as benefiting the most from the bonanza to Central government employees and pensioners.
On the flip side, it has become a trigger for employees of public sector undertakings (PSUs) and state government employees to demand similar pay hike. Employees of PSUs have listed Rs. 18,000 minimum monthly salary as one of their demands for which they are all set to strike work on September 2.