Substantial Pay Hike of Govt Employees.

The central government Thursday revised the recommendations of the Sixth Pay Commission to grant substantial hikes to its five million employees, with special attention being paid to military and paramilitary personnel.

'The cabinet has broadly accepted the recommendations of the Sixth Pay Commission with some modifications in the wake of representations received from various sections and associations of central government employees,' Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a cabinet meeting chaired by Prime Minister Manmohan Singh.

The revision translates into a 20 percent hike over the 40 percent across-the-board hike the pay commission had recommended.

The revision will enlarge the government's wage bill by Rs.221 billion in the current fiscal that ends March 31, 2009, Dasmunsi said.

The prime minister would announce more details Friday during his address from the ramparts of the Red fort on Independence Day, he added.

The minimum basic pay for a central government employee would now be Rs.7,000 a month, which will translate to around Rs.10,000 after adding allowances, the minister said.

As for arrears, central government employees would get 40 percent in the current fiscal and 60 percent in fiscal 2009-10, Dasmunsi said.

The revised scales would be retroactive Jan 1, 2006 and would be payable from Sep 1, 2008, the minister said.

The other highlights of the cabinet decision are:

* Enhancement in the fitment in revised pay bands recommended by the pay commission to be based on multiplication factor of 1.74 to 1.86 to result in increased emoluments for government employees;

* Increase in the annual increment rate from 2.5 percent to 3 percent;

* At least three promotions assured for defence personnel and civilian employees under modified assured career progression (ACP) scheme. Civilians will be assured of promotions after 10, 20 and 30 years of service while junior and non-commissioned officers and personnel below officer rank (PBOR) would be eligible for this after 8, 16 and 24 years of service.

* Military Service Pay enhanced from Rs.1,000 to Rs.2,000 for PBORs. MSP retained at Rs.6,000 for officers up to brigadier's rank;

* Middle level officers - colonels, brigadiers and equivalent - placed in the highest pay band of PB-4.

* Lieutenant generals overlooked for promotion as army commanders due to lack of residual service would now get the grade of Army Commander.

The report of the Sixth Pay Commission, headed by Justice (retd) B.N. Srikrishna, was submitted to Finance Minister P. Chidambaram here March 24.

It immediately raised a storm of protests from both civilian and defence personnel, following which the government had appointed a committee under cabinet secretary K. Chandrashekhar to study the representations received.

The three service chiefs, on their part had made a joint representation to Defence Minister A.K. Antony saying their expectations had not been met. On Wednesday, the prime minister had chaired a high-level meeting to consider the Chandrashekhar committee's recommendations with regard to the armed forces.

Thereafter, official sources said, finance ministry bureaucrats had burned the midnight oil to ready the revised package for both civilians and defence personnel and finished the task only by 5 a.m. Thursday.