7th pay commission: Central government employees eye big benefits from 1 year of GST gains

7th pay commission: Central government employees have been waiting for years now for their demands to be met. They have been saying that relentless price rise has affected their lifestyle even as their income has not kept pace with it. From Children's education to food and more, everything is costing more while salaries are stuck at older levels. While the 7th pay commission has been cleared for them and has been implemented in full much earlier, still there is a big problem as the report had recommended a pay hike as per a fitment factor of 2.57 times. Staff wants the hike to be much more, by at least 3.68 times that would push up the minimum salary at the starting level to at least Rs 26,000 and have a big impact on salaries across the rising hierarchy.

However, while 7th pay commission report had implemented a windfal for central government and other employees, initially their demands for a bigger hike was met with some kind of acceptance. However, at that time central government employees had also been threatening to go on a strike. But that never happened and the government and the issue was put in cold storage. The government then went to the extent of saying that it was not mulling any hike in salaries. This was said by a Union minister. However, it flew in the face of talk by FM Arun Jaitley when he had promised to look favourably at the Seventh pay commission based salary hike demands.

The biggest problem for the government is that it needs to ensure that a 7th pay commission based hike in salaries of central government staff does not cause inflation to spiral. It also needs to ensure that the massive funds outgo can be financed without spurring deficits. Notably, many state governments that implemented the seventh pay commission report for state government employees have raised this warning flag.

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However, now that one year has passed since the implementation of goods and services tax, the government is saying that tax collections are vibrant and much more is expected as the new tax regime reveals its explosive potential to boost the economy to a much higher level. This will surely, be a massive point that the government can now mull while considering a hike in 7th pay commission based salaries over and above the recommendations of the 7th CPC report.