7th Pay Commission: Minimum pay to be Increased by Fitment Factor 3, without Arrears

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The government is expected to increase the minimum pay afar the recommendation of the 7th Pay Commission for its employees next year. Hike in minimum pay to Rs 21,000 from Rs 18,000 recommended by the 7th Pay Commission and approved by the Cabinet, the government is studying to increase the minimum pay. Under the 7th Pay Commission, the government is expected to raise the Fitment factor from the ongoing 2.57 times to 3.00 times.

The Cabinet may take up the matter of hike in minimum pay in January 2018. The National Anomaly Committee (NAC), formed by Union Finance Minister Arun Jaitley to keep a vigil into the anomalies in the 7th Pay Commission recommendations’ implementation, probably endorse a first-time 17 percent rise over Rs 18,000 minimum pay approved under the 7th Pay Commission, as per the reports. According to the reports, the government has given a signal to proceed to the NAC for an increase in minimum pay with Fitment factor of 3.00 times. The government, on the other hand, is not expected to pay arrears on higher minimum pay because the government doesn’t want to put an extra burden on exchequer by releasing arrears.

Reportedly, the Finance Minister Arun Jaitley had promised representatives of the central government employees that minimum pay would be increased beyond the 7th Pay Commission. “Since the Finance minister Arun Jaitley had promised to hike minimum pay after discussions with all stakeholders, efforts would be made to fulfill the same,” a Finance Ministry official was quoted as saying. The NAC is expected to submit its report on minimum pay soon, which will be later examined by the Empowered Committee of Secretaries and the Department of Expenditure. The 7th Pay Commission, however, had recommended a 14.27 percent in basic pay, which was the lowest in last 70 years. After this, the central government employees started demanding the rise in minimum pay from Rs 18,000 to Rs 26,000 and fitment factor 3.68 times from 2.57 times.

2 COMMENTS

  1. unless the tax percentage is regularised, there is no use in rising the factor. above 5 lakhs we are paying 20% tax and above 10Lakhs 30% . So the net benefit of this hike is going to be a very minor. until the income tax elements are as follows, this is not going to help at all
    up to 5 laks-5%
    5-8 laks – 10%
    10-12 laks – 20%
    12 and above – 30%

  2. until the tax tarrif are revised as beyond 5 lakhs-8lalkhs = 10% and beyond 8lakhs 20 % up to 12 laks…this hike of fitment is not going to help. our government is giving this side by way of pay commission and taking back in the name of tax

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