M A I N   N E W S

21% pay hike for central, defence staff
Girja Shankar Kaura
Tribune News Service

New Delhi, August 14
Prime Minister Manmohan Singh-led UPA government lavished a bonanza on the country’s civil and defence staff on the eve of the country’s 61st Independence Day by approving a wage hike higher than that recommended by the Sixth Pay Commission.

As per the announcement there would be an average increase of 21 per cent in salaries of over 50 lakh government employees with effect from January 1, 2006, which was recommended by the Sixth Pay Commission.

The announcement from the government came after the meeting of the Union Cabinet chaired by the Prime Minister gave its approval to the proposal for hiking the pay of the government employees.

Briefing newsmen after the meeting, information and broadcasting minister P.R. Dasmunsi said more details would be announced by the Prime Minister during his Independence Day address from the ramparts of the Red Fort tomorrow.

The bonanza would be particularly sweet for the over 50 lakh employees, as apparently the Prime Minister shot down finance minister P. Chidambaram’s suggestion that the new wage be effective from January 2007 instead of January 2006 because of the heavy run on this year’s Budget.

The finance minister had also wanted that the past dues be parked in the general provident fund to be provided as pension after the retirement of the employees so that this year’s outgo from the Budget would be limited to Rs 12,500 crore.

Reports suggest that the Prime Minister shot down all such suggestions and gave an approval for the new wage bill to be effective from January 1, 2006. However, the actual pay-out would come in November only after the monsoon session of Parliament in September passes the finance ministry’s supplementary Demand For Grant to fund the wage bill.

The wage hike would increase the financial implication for the Centre by Rs 17,798 crore annually and the arrears with effect from January 2006 would cost Rs 29,373 crore, Dasmunsi said. There were also reports that the payment of arrears would be made in cash.

The government increased the minimum entry level salary of a government employee to Rs 7,000 against Rs 6,660 recommended by the commission headed by Justice B.N. Srikrishna, who submitted the report in March this year.

This would mean that the employee at the lowest level would have a salary that would be beyond Rs 10,000, including allowances. The government also increased the rate of annual increment from 2.5 per cent as suggested by the commission to 3 per cent. The raise takes into account the commission’s miscalculation of the dearness allowance - absorbed in the new basic pay as 74 per cent whereas it should have been 83 per cent.

Prime Minister Manmohan Singh had on Wednesday held a meeting with external affairs minister Pranab Mukherjee, defence minister A.K. Antony and finance minister P. Chidambaram to discuss the pay commission report and the recommendations of the empowered committee of secretaries that went into it.

In the defence sector, it approved at least three assured promotions for all defence forces personnel and civilian employees under the modified Assured Career Progression scheme.

While civilians would get this after 10, 20 and 30 years of service, defence forces jawans would be promoted under the ACP after 8, 16 and 24 years.

The government for the first time also approved military service pay for armed forces personnel, under which officers would get Rs 6,000 over and above their pay per month. The military service pay for the personnel below officer’s rank (PBOR) would be Rs 2,000.

There would also be a significant improvement in the salaries of Brigadiers as the government agreed to put them in pay band 4 (Rs 39,200-67,000) as against the suggested pay band 3 (Rs 15,600 - 39,100). Besides, senior Lt-Generals overlooked for promotion as Army Commanders due to lack of residual service would now get the grade of an Army Commander (secretray’s grade).

In the case of existing Major-Generals/Lt-Generals, the MSP would be taken into account notionally for the fixation of pay as on January 1, 2006.

For the Indian Police Service and Indian Forest Service, relief would come in the form of abolition of the Deputy Inspector General scale. There would also be no discrimination between Group B and Group A service officers in the form of a differential basic pay at the time of joining, as suggested by the commission. They would both start at the same scale, as is prevalent now.

As a replacement of the pay scale of Rs 24,050-26,000, a separate pay scale has been carved for the DGPs, PCCFs, GM (Railways), members of the boards of income tax, customs and central excise, postal and ordnance factories among others, who were in this pre-revised scale. This would take them to the level of Rs 80,000 in two years as against three years in the pre-revised scale.

Further, the IPS Pay Rules and the Indian Forest Service Pay Rules would be appropriately modified to provide in each state cadre one post of DGP and one post of PCCF at the apex level of Rs 80,000 for heading their respective forces.

The financial implication of the Pay Commission on the General Budget would be Rs 15,717 crore and Rs 6,414 crore on the Railway Budget in 2008-09.


  • A 20 per cent raise over the pay bands suggested by the commission with an average increase in pay at 21 per cent uniform
  • 3 per cent raise in basic pay every year.
  • New wages to be effective from January 2006.
  • No Cabinet secretary rank for Intelligence Bureau chief, the three service chiefs or the chairman, Railway Board.
  • Group D personnel to stay (peons in ministries and porters in the Railways).
  • Military service pay for persons below the officer rank (POBR) will be Rs 2,000 per month.
  • Significant hike in salaries of Brigadiers: They move to pay band 4 (Rs 39,200-67,000) from the suggested pay band 3 (Rs 15,600-39,100)
  • DIG-scale abolished in IPS and Indian Forest Service.
  • Arrears to be paid in two installments — 40 per cent this fiscal and 60 per cent in the next financial year.
  • Minimum entry level pay raised to Rs 7,000 from Rs 6,660 per month recommended by the commission.
  • Financial implication of Pay Commission on General Budget will be Rs 15,700 crore and Rs 6,400 crore on the Railway Budget in 2008-09.



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