Highlights of the 6th Pay Commission as cleared by the cabinet

Highlights:

• Pay revision with effect from January 1, 2006.
• Arrears to be paid in two installments -- 40 per cent this fiscal and 60 per cent in the next financial year, said Information and Broadcasting Minister P R Dasmunsi.
• 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 would be Rs 15,700 crore (Rs 157 billion) and Rs 6400 crore (Rs 64 billion) on the Railway Budget in 2008-09.
• Average increase in pay is 21 per cent, said expenditure secretary Sushma Nath.

20 % raise over the CPC recomendations; Effective from January 2006; 3% Increment

BUREAUCRACY'S BIG HIKE

A 20 % raise over the pay bands suggested by the Commission

Uniform 3% raise in basic pay every year. The norm is a Rs 500-increase annually within grade scale

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 Railways)

Military service pay for persons below the officer rank (POBR) would 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

A wage hike higher than those recommended by the Sixth Pay Commission, marginal increase in annual increments and the payment of arrears in cash are some of the sweeteners incorporated in the proposal for Thursday's Cabinet meeting after Prime Minister Manmohan Singh's intervention.

The new pay package for the 55 lakh Central government employees, to be announced on August 15, proposes a 20 per cent raise over the pay bands suggested by the Commission. The panel in May suggested a gross 40 per cent hike, which means an effective 25 per cent after taxes. "The net jump in pay would be upwards of 30 per cent with the additional increase more for lower grade staff to narrow their difference with the (pay of) senior officials," said sources.

This 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, they said. The proposed annual increment in the basic pay would also be a tad higher than the 2.5 per cent suggested by the Commission.

The Cabinet proposal talks of a uniform 3 per cent raise every year. The current norm is a Rs 500-increase in the basic pay annually within the grade scale.

But what would be music to the bureaucrats' ears is that the PM has 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. Chidambaram had also wanted that the past dues be parked in the General Provident Fund to be provided as pension after retirement of the employees so that this year's outgo from the Budget would be limited to Rs 12,500 crore.

But the PM would have none of that. He has ensured that the new pay would be effective from January 2006, as recommended by the Commission, with 40 per cent of the arrears paid in the current fiscal and the remaining 60 per cent next year.

The actual pay-out would come in November after the monsoon session of Parliament in September passes the Finance Ministry's supplementary Demand For Grant to fund the wage bill, said sources.

What has also been shot down, though by the Committee of Secretaries, is the inclusion of heads of other services in the rank of Cabinet Secretary. The CS will remain primus inter pares, the first among equals, and that position would not be granted to the head of Intelligence Bureau, the three service chiefs or the Chairman Railway Board—as had been demanded.

There would also be no scrapping of Group D personnel (peons in ministries and coolies in Indian Railways). The Commission had suggested that these posts be subsumed in Group C of clerks, fresh induction be stopped and jobs be outsourced.

As for the armed forces, the good news is that military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month. The forces had demanded Rs 3,000 as against Rs 1,000 introduced by the commission.

There would also be a significant improvement in the salaries of Brigadiers as the government has 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).

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, said sources.