7th pay commission: Big day looming for central government employees; will PM Modi oblige with a pay hike?

7th pay commission: Cenral government employees are virtually holding their breath as Independence Day looms large. Their wait has been long and patient and expectations have been raised sky high about an impending pay hike due to various reasons. However, there are a few other reasons that may well go the other way. Will they go on to cancel each other out and the the staff is left with a status quo? Or will an Independence Day 'gift' come their way?

7th pay commission report recommendations did not leave the central government staff entirely satisfied. They had asked for a 3.68 times hike in fitment factor with minimum salaries rising to 26,000 but that particular demand was not fulfilled. The 7th CPC panel plumped instead for a 2.57 times hike with salaries at the bottom rising to Rs 18,000 in the revised salary structure. 

Among the many reasons being cited that favour a salary hike for central government employees is that the monsoon has been quite adequate in many critically important farming states and economic growth is being projected much higher. Apart from that, many BJP ruled states have given a go ahead for implementation of seventh pay commission report recommendations and on top of that, the general elections 2019 are looming. Considering that central government employees and pensioners add up to almost 10 mn, that is a group that just cannot be ignored going forward.

On the other hand, inflation is rising and recently the Reserve Bank of India (RBI) in its monetary policy meet hiked the repo rate by 25 basis points to 6.5% fearing a spike in inflation. Notably, it blamed 7th CPC house rent allowance (HRA) as one of the reasons that is boosting price rise. Then there is the question of meeting demands of farmers and other interest groups in the country. The treasury is of course limited and cannot handle everyone's demands.

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So, will the BJP led NDA government under premiership of Narendra Modi take the decision or not? His speech is definitely going to be keenly awaited.