The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday gave its approval for extension of the Seventh Pay Commission’s term by four months.
The panel, headed by Justice A K Mathur, will now have to submit its report by December 31. The commission was set up by the UPA government one year in advance on February 28, a little before the country went into the 2014 General Elections.
The pay panel had to give recommendations by August 27, 2015. Its recommendations will come into effect from January 2016. The government, however, decided to give an extension due to huge volume of work and intensive consultations with stakeholders.
The commission will look into the salaries, allowances and pensions of about 80 lakh employees and pensioners and it is expected to give a salary hike of nearly 30 per cent. The proposed pay hike is perceived to be a stimulus to the economy as it will increase the disposable income of government staff significantly and step up demand for consumer goods.