7th Pay Commission: Salary hike for staff may get boost; here is why

May 05, 2018, 10:35 AM IST

7th Pay Commission: Central government employees may well get to hear some positive news. Their wait has been long over their salaries being hiked via a fitment factor by, not the current rate of 2.57 times, but by 3.68 times. The lower number is not enough say government employees as it negatively impacts their lifestyle due to inflation in all aspects of life. 


The problem with the entire issue is the impact on central government revenues that the funds outgo on salaries entails. From Indian Railways to states like Tamil Nadu and now Jammu and Kashmir have said that their finances will be stretched due to the 7th pay commission outgo. While they have stuck to fitment factor of 2.57 times , demands at the central level is higher and as such the impact will be greater.


However, things are changing for the better and the state of the economy is raising hopes of the entire country. These positive occurrences have raised the chances of 7th Pay Commission salary hikes coming sooner rather than later. 


The latest one that is powering talk of 7th pay commission is that of GST revenue collection. Goods and services tax (GST) has for the first time ever crossed the Rs 1 lakh crore mark and reached a total of Rs 1,03,458 crore. This will bring great respite for government. And this figure is set to keep on rising over the months as the potential of GST to transform tax collections and pad up government revenues is massive. 


With its revenues rising, government will be much better placed to positively think about hiking pay of central government employees beyond 7th pay commission recommendations.


Another event that is positive on 7th pay commission salary hikes on the economy doing well is EPFO data that suggests that jobs creation is happening and proof of that is in the fact that some 3.11 million people joined the social security fund between September 2017-February 2018 period. This kind of job creation happens when the economy is growing well. 


7th Pay Commission salary hikes may also be impacted by elections. States polls as well as general elections in 2019 are coming and authorities will find it tough not to agree to demands of government employees.

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