7th Pay Commission: Cabinet gives its approval; employees to get Rs 1 lakh crore

The Union Cabinet has approved 7th Pay Commission's recommendations on Wednesday. Salaries of central government employees are set to increase by 23.55% effective from January 1, 2016. 

The Cabinet Committee on Economic Affairs (CCEA) has hiked the gratuity cap for government employees from Rs 10 lakh to Rs 20 lakh, according to sources.

The government had in January set up the high-powered panel to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners, PTI reported on Tuesday. 

The Commission had recommended 23.55% overall hike in salaries, allowances and pension involving an additional burden of Rs 1.02 lakh crore or nearly 0.7% of the gross domestic product (GDP).

A secretaries' panel, headed by Cabinet Secretary Pradeep Kumar Sinha, had vetted the 7th Pay Commission recommendation and had sent its report to the Cabinet.

The pay panel had in November last year recommended 14.27% hike in basic pay at junior levels, the lowest in 70 years. 

The previous 6th Pay Commission had recommended a 20% hike which the government doubled while implementing it in 2008.

Read our full coverage on 7th Pay Commission here