New Delhi, Nov 27: In a good news for central government employees, the government is planning to pay higher allowances and five months’ arrears according to the 7th Pay Commission recommendations from January, 2017. The government wants the situation to get normal following demonetisation drive before paying higher allowances and five months’ arrears under the 7th Pay Commission recommendations to its 4.8 million employees. Higher allowances and five months’ arrears under the 7th Pay Commission recommendations will be paid after Cabinet nod to ‘Committee on Allowances’ report.
According to Finance Ministry sources, Central government will have to pay the arrears of enhanced allowances this time because the enhanced allowances under recommendations of 7th Pay Commission have not been paid in August when the pay hike and its arrears were paid. The ‘Committee on Allowances’, headed by Finance Secretary Ashok Lavasa, on fatter allowances under the 7th Pay Commission recommendations is ready with its report. But the cash crunch post currency ban has forced the Finance Ministry to keep in abeyance the enhanced allowances till things normalize.
The entire country is facing a shortage of cash after the demonetisation of Rs 500 and Rs 1000 currency notes, which accounted for 86 per cent of all cash in the economy. The government is hopeful that situation will get normal after December 30 and it will be ready to pay enhanced allowances and five months’ arrears under the 7th Pay Commission recommendations to its employees.
The central government employees have been waiting for fatter allowance since July when the notification for the implementation of the 7th Pay Commission recommendations was issued. The 7th pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances, which was opposed by the central government employees’ unions. To resolve this issue, Union Finance Minister Arun Jaitley formed the ‘Committee on Allowances’ on July 22 for examination of the recommendations of 7th Pay Commission on allowances other than dearness allowance.
Once the ‘Committee on Allowances’ will submit its report to the Finance Ministry, it will be sent to the Cabinet for approval. Earlier we reported that the government has decided to stick to the recommendations of the 7th Pay Commission on basic pay and there will no no hike in basic pay or fatter allowances.