7th Pay Commission recommendation: Your allowances hike may have wait a big longer; here's why

Highlights:

1. A panel headed by Finance Secretary Ashok Lavasa and tasked with examining the 7th Pay Commission’s (7th CPC) recommendations on allowances has been unable to reach a conclusion in its last scheduled meeting held on March 3

2. In late June last year, after implementing the CPC proposals on salary and pension for the central government’s 4.7 million employees, Jaitley had announced the Lavasa panel would examine the suggestions on allowances

3. Of 196 allowances, the CPC report had recommended abolition of 52 and subsuming of another 36 into larger existing ones

Lavasa panel's examination of the 7th Pay Commission recommendations on allowances given to the government employees has been unable to reach a conclusion in its last meeting held on March 3.

A panel headed by Finance Secretary Ashok Lavasa and tasked with examining the 7th Pay Commission’s (7th CPC) recommendations on allowances has been unable to reach a conclusion in its last scheduled meeting last Friday, the Business Standard reported.

According to the report, it will now have a few more meetings before submitting its report to Finance Minister Arun Jaitley.

“There were no conclusive decisions taken at the meeting last Friday. There will be some more meetings. For now, the panel is not ready to give its report to the Finance Minister,” the report said citing a senior government official aware of the developments.
In late June last year, after implementing the CPC proposals on salary and pension for the central government’s 4.7 million employees, Jaitley had announced the Lavasa panel would examine the suggestions on allowances.

The panel had time till October to give the report but that got delayed.

The decision on allowances was postponed because the CPC wanted a number of these to be abolished or subsumed, cited the report. Employee unions were opposed.

It was earlier reported that the panel would submit its recommendations to the government’s political leadership soon and the Centre could announce revised allowances any time after March 11, the day of counting the votes for the five Assembly polls, and probably before the second half of the Budget Session of Parliament ends. That timeline now seems doubtful.

The news report further said that of 196 allowances, the CPC report had recommended abolition of 52 and subsuming of another 36 into larger existing ones.

A deferment on revising of allowances meant that as opposed to a burden of Rs 1.02 lakh crore as envisaged by the CPC, the government had provisioned for Rs 84,933 crore in 2016-17 for pay and pension, including Rs 12,000 crore in arrears, it added.

There are other recommendations on allowances which the panel led by Lavasa has been tasked with examining.

The recommendations include a change in the present system of accounting, wherein pay and allowances are clubbed and it is difficult to bifurcate these. The CPC recommended a separate object head for budgeting and accounting be used to record the expenditure.