Saturday, 18 January 2014

7th Pay Commission News : Pay Panel members to be named, 50 % DA to be merged and Age of retirement to be increased

The UPA - II Government is going to decide about the General Election dates in March 2013 and before that the news is that Government employees may get there 50 % DA merged into the basic pay.  Alongwith this decision, the government will also announce its decision for raising retirement age of government employees to 62.  And in a separate news, the Government will constitute the for 7th Pay Commission.  We take a look at all the above information one by one.

7th Pay Commission News : Pay Panel members to be named, 50 % DA to be merged and Age of retirement to be increased

The Pay Panel is to be constituted before March as per reports available.  The Central government has already made SBG (Budget Grant) provision of Rs.3.5 crores towards constitution of the Panel in this fiscal year 2013-14. Once constituted, the 7th Pay Commission will be mandated to submit its report in two years i.e. by March 2016.  UPA-II will also be following the laid practice of naming a former Supreme Court Judge to head the commission and its other members would include experts and officials.  Though the date of implementation of 7th Pay Commission is 1.1.2016, it will be in the hands of the Party which wins the General Elections in 2014.

The second news that is making rounds is that DA of 50 % is to be merged with your basic pay.  The 6th pay commission explicitly not allowed the merger of DA with Basic as soon as it crosses 50 %

"The 6th Central Pay Commission had recommended not to merge Dearness Allowance with basic pay at any stage," 

But since its election time and with the fast soaring inflation, it may seem that UPA-II might just agree to this demand.  In any case, if it were to decide to merge 50 % DA with basic, it has to do so before March because at that point and time it will be 100 % (90% current plus 10 % from 1.1.2014.)  There is also the impact of 25% rise in all allowance in case DA crosses 50 % for government to consider. 

The file concerning the raising of age of retirement of government servant to 62 is under due consideration in Ministry of Finance as of now.  With the Elections due in May-June, the Finance Ministry will have a interim budget this year for fiscal 2014-15 and the vote-on-account for this Interim Budget is scheduled to be in an around 2nd week of February 2014.  So without putting too much expectations on the budget 2014-15, we can hope that this two important matters are approved in this interim budget.

What makes the decisions difficult for the UPA-II is the utter failure of the popularist measures and freebies announced by it prior to the recently concluded state elections in Delhi, Madhya Pradesh, Rajasthan and Chhatisgarh.  Some of the psephologists have blamed these freebies for the whitewash UPA suffered in these state elections.  This actually makes it a little more difficult for those who are in favour of announcing populist measures before the General Election dates are announced.   

Government servants can keep their fingers crossed and hope that UPA-II is in a full Election mode.

Updtate : 50 % DA merger approved by Cabinet 20.2.2014 Read here


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24 comments

  1. Sir... there are rumours doing rounds that the retirement age may be raised to 62 by feb 2nd week... is it true ?

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    1. Yep Anon the news is indeed true, but the FinMin and UPA-II has to accept the proposal which they will given the Election compulsions :)

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  2. Hi Mr Vijay
    The elections are going to be announced any time this month and keeping that in mind do you think still there is any scope for enhancemet of retirement age

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  3. Hi Mr Vijay
    The elections are going to be announced any time this month and keeping that in mind do you think still there is any scope for enhancemet of retirement age

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    Replies
    1. Yes Anon there is very good possibility that the same will be announced before 28th Feb and well before the elections are declared. As I had posted, the Government has constituted the Pay Panel and hope I am right about both the DA merger and retirement age too :)

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    2. This time you are wrong about Retirement age Mr. Vijay.

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    3. Hi annon,do u have some news on this,kindly mention.

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    4. very few time left only 10 to 15 days...it is not possible this time but in future after 5 to 6 months may be. Definitely Mr. Vijay is wrong this time.

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    5. Bt this requires just one cabinet meeting to take such decissions,and if they dont then after5-6months the chance will even get narrower.

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  4. Kindly comment on the above post Mr VIjay

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  5. Apart from increasing the pay scales the panel will also look at other suggestions related to working conditions and may also review the retirement age, which is current at 60 years. There is widespread demand to increase the retirement age to 62, although the move will force the government to defer hiring. The terms of reference of the seventh pay panel are, however, yet to be made public.

    source - Times of India

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  6. A recommendation for the retirement age to be set at 65yrs has also been brought in the lok sabha ,what do you think about this Mr Vijay??

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  7. Mr Vijay kindly update on latest happenings

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  8. Yep Sir will do so once I get concrete information on whether the 50% merger is happening or both are happening. Will make a fresh post once I get the news

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  9. Do you mean that the retirement age is not going to be hiked??

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    1. Anon the file is in Finance Ministry so its now a political decision rather than a economical one for UPA II

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    2. m sry to say , Mr. Vijay's predication about retirement age 62 is completely based on rumors .

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  10. Any latest information,Mr Vijay??

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    1. Anon, the report of 62 years is not a rumour neither is 50% merger. Government is coming out with announcements as expected. Thursday saw Government announcing the OROP scheme for Defence personnel. Lets hope for the best

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  11. Mr Vijay, the interim budget is scheduled on 17th so can we expect something in regard to that??

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    1. Anon Sir, both the decisions are political ones not financial so maybe the FM may keep some outlay but the decision will be made by UPA II (for political mileage) rather than the FM if and when it gets approved

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  12. Mr Vijay there is some fresh news coming up kindly update

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  13. Ha ha... I know that the govt.no increase retirement age of central govt. employee.

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  14. THE CHANCES OF THE GOVT. INCREASING THE RETIREMENT AGE TO 62 SEEMS AN UNLIKELY ACTION BY THE GOVT. PARTICULARLY BEFORE THE LOKSABHA POLLS. THIS IS BECAUSE VOTES OF GOVT. SERVANTS & THEIR FAMILY MEMBERS WILL CARRY INSIGNIFICANT IMPACT BECAUSE OF THEIR SMALL PERCENTAGE AND HIGHLY SCATTERED NATURE. ON THE OTHER SIDE, SUCH DECISION FOR RAISING RETIREMENT AGE WILL HAVE A HAVOC NEGATIVE IMPACT UPON THE COMMON ELECTORATE ALL OVER INDIA WHICH THE PRESENT GOVT. CANNOT AFFORD. RAISE OR NO RAISE THE LOT OF GOVT. SERVANTS WILL ALWAYS BE THERE BUT THE ACTUAL VOTE BANK HAS BEEN A VERY SLIPPERY AREA FOR THE CURRENT GOVT. AFTER THE CONG PARTY DEBACLE IN SEVERAL STATES.

    HOWEVER, THERE IS ONLY ONE SILVER LINING THAT A PARLIAMENTARY STANDING COMMITTEE HAS STRONGLY RECOMMENDED CONSIDERATION OF THE ISSUE OF RAISING THE RETIREMENT AGE FOR VARIOUS SOCIAL FACTORS. IF THE EMPLOYEES ASSOCIATIONS TAKE THE CLUE AND CONTINUE TO PURSUE WITH WHOEVER IS IN THE GOVT. THEN , MAY BE, THE NEXT GOVT. WILL TAKE A POSITIVE DECISION ON THIS ISSUE. TIILL THEN GOOD LUCK, FRIENDS.

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