The
Reserve Bank of India (RBI) Governor Urjit Patel attends a news conference
after the bimonthly monetary policy review in Mumbai, India December 7,
2016.Reuters fileCentral government employees are seeing a ray of hope with
regard to hike in allowances after RBI Governor Urjit Patel's comment during
the post-monetary policy review meeting on December 7, 2016. While the Narendra
Modi government has implemented the salary hike as recommended by the 7th
Central Pay Commission (CPC), the decision on allowances is pending.
After
the second meeting of the Monetary Policy Committee (MPC) last week, Patel said
that the payment of arrears and higher salaries did not adversely affect
inflation, as was generally expected.
"The
disbursement of salaries and arrears under the 7th Pay Commission award has not
been disruptive to inflation outcomes," he said. A report by India Ratings
had estimated the amount as Rs 34,600 crore.
The
subsequent response on the allowances part revealed that the delay in
implementation would spread the impact on the government's finances over two
financial years.
"The
extension of two months given to the Ministry of Finance to receive the
notification on higher allowances under the Commission's award could push its
fuller effect into the next financial year rather than this financial
year," Patel said.
This
is seen as an indication that the government could make some announcement on
raising allowances in February 2017, coinciding with the budget.
The
Confederation of Central Government Employees and Workers felt the RBI
governor's comments as a signal for implementation of proposals on
allowances.
"The
7th CPC effect on the Government expenditure is minimal and doesn't have any
impact on the inflation and prices and there is scope for further improvement
in fitment formula provided the Government is ready to consider the staff side
demands," the confederation said.
"The
allowances will be revised only after February 2017 and come into effect in
next financial year. The only struggle is only the solution for the Central
Government employees to get our main demands resolved such as revision of
fitment formula and allowances," it added.
The
recommendations of the 7th CPC cover 47 lakh Central government employees and
53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from
the defence forces.
The
CPC examined 196 allowances and gave its recommendations on abolishing or raising
some of them while recommending others to be subsumed with other perks.
It
had proposed 138.71 percent hike in HRA and 49.79 percent for other allowances
while submitting its voluminous report last November.
The
additional amount on account of hike in HRA and other allowances is about Rs
29,300 crore (Rs 17,200 crore + Rs 12,100 crore) during the current fiscal, as
estimated by the 7th CPC.
Source
: http://www.ibtimes.co.in
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