The much-awaited official notification of the revised central government pay rules is expected to be issued this Friday. The notification with regard to the Sixth Pay Commission award is ready and is currently being approved by statutory authorities. Sources said the dearness allowance effective this July is also likely to be announced the same day. On August 14, the Union Cabinet had approved an improved and tweaked version of the Sixth Pay Commission award with effect from January 1, 2006. Consequently, an estimated 4.6 million central government employees will receive a raise of 28-40 per cent over their existing basic pay. Employees will start receiving their higher salaries and allowances with effect from this September.Sources added the first installment of arrears of Rs 11,748 crore will be paid in cash with effect from September as announced earlier. There had been some apprehensions that with the upcoming fifteenth session of the Lok Sabha scheduled to begin on October 17, Parliamentary sanction for the additional spending sought under the supplementary demand for grants would somehow delay the arrears payment.
The Cabinet had decided to issue arrears in cash over two years — 2008-09 and 2009-10 — with the first instalment of 40 per cent being paid by September and the balance next year.
As a consequence of the revised salaries and allowances, the central government’s wage bill is expected to increase 21 per cent on account of an additional expenditure of Rs 22,100 crore in the current financial year (2008-09). Of this, Rs 15,700 crore will be accounted for by the central government employees and Rs 6,400 crore by the railway staff.
Of the Rs 15,700 crore, the first installment of arrears will account for Rs 8,048 crore. Of the Rs 6,400 crore impact on the railway budget, Rs 3,700 crore will be arrears.
The annualised impact of the new salary structure is estimated at Rs 17,798 crore, adding to the approximate Rs 1,04,000 crore annual pay, allowances and pension bill of the Centre.