New Delhi: The government is likely to keep 7th Pay Commission award in "abeyance" on account of following increased volatility in the markets as a result of Brexit.
Brexit could impact on 7th Pay Commission award for 4.8 million central government employees and 5.2 million pensioners.
"The process of 7th Pay Commission award, which is likely to be implemented within two months, which will be kept in abeyance on account of following increased volatility in the markets as a result of Brexit," A Finance Ministry top official told The Sen Times on Friday on condition of anonymity.
He further said "the issue of increased volatility in the markets as a result of Britain’s exit from the European Union may compel the government to keep in abeyance the 7th Pay Commission award as the market would take 4-5 months to get stabilized. However the government wants to implement the 7th Pay Commission award speedily...in a time bound manner."
Fearing a steep jump in inflation, Finance Ministry is likely to scale down the the proposal of the Empowered Committee of Secretaries headed by cabinet Secretary P K Sinha, who is proceeding the 7th Pay Commission report, he added.
The Empowered Committee of Secretaries recommended a 30 per cent increase in the central government employees’ basic pay and minimum basic pay to Rs 24,000 per month and the maximum basic pay Rs 2,70,000.
They also recommended for doubling of existing rates of allowances and advances, which had been recommended for abolition by 7th Pay Commission like risk allowance, small family allowance, festival advance, motor cycle advance.
The 7th Pay Commission headed by Justice A K Mathur had suggested a maximum basic pay of Rs 2,50,000 and a minimum of Rs 18,000.
The basic pay and pension for 4.8 million central government employees and 5.2 million central pensioners will have retroactive effect from January 1, 2016, but the allowances would be paid from the implemented date of 7th Pay Commission.
Implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17.
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