Dearness Allowance announcement before Diwali ?

Dearness Allowance announcement before Diwali ?

Usually Government approves the dearness allowance during the 1st week of September and release the government order in 3rd or 4th week of September, but this year government not yet approved dearness allowance from 1.7.2016. After 7th Pay Commission Implementation the dearness allowance computation formula & the base year must be changed, the computation formula & base year changed in the earlier pay commission also

Pay Commission	Base Year
3rd Pay Commission	1960 =100
4th Pay Commission	1982=100
5th Pay Commission	1982=100
6th Pay Commission	2001=100
7th Pay Commission	2011=100  (expected)

During September 1st week JCM Staff side Secretary writes letter to Ministry of Finance with the subject “Future computation of Dearness Allowance and adoption base index figure to Revised Minimum Wage”, in this letter Union demands to grant of 3% dearness allowance with effect from 1.7.2016, even though there is no official announcement from the government. Even all the state government employees are waiting for the announcement from the Central government.

And again last week Union writes letter to the Secretary, Ministry of Finance to grant the dearness allowance at the earliest.

Dearness allowance from 1.7.2016 should be 3%

Dearness Allowance (DA) Formula after 7th Pay Commission (assumption)

=((12 Months Average of AICPIN)-261.4)*100/261.4)

All the government employees are eagerly waiting for the announcement from the government. As per the source the dearness allowance announcement will be released before Diwali festival. Hope this announcement will be a Diwali gift for Central government employees.

Status of HRA and TA in 7th CPC Salary

Status of HRA and TA in 7th CPC Salary

The Government has decided to Constitute a committee to examine the 7th CPC Allowances. We cannot assume anything about the rates of Allowances until the Committee submit its report on Allowances.

Mainly the HRA and TA are one of the Main component of Salary.

 So the government employees are disheartened by the Government decision to take time to decide on these allowances.

Already it has been reported that 7th CPC will be implemented in a staggered manner.

Now it is clear that, if the 7th Pay Commission come into force with immediate effect after publication of Gazette Notification, the HRA and TA will be paid at Sixth CPC rates in pre revised Scale. It means the amount of HRA and TA paid in Sixth CPC will continue for next few months. The Central staffs will be paid all the allowances in pre revised Scale up to the Committee decides on Allowances. It will take more than four months for Government to decide on HRA and TA.

So actual increase on account of 7th pay commission implementation will be 14.29 percent over Sixth CPC Basic + 125% DA. The increase in Basic Pay only will be reflecting in 7th CPC salary .

Nobody can say that 7th CPC gives 23.45% increase in Pay and Allowance for CG employees at least for some time.

7th Pay Commission implementation: Government says amount allocated to manage impact

7th Pay Commission implementation: Government says amount allocated to manage impact

Speculations are rife as Centre to take decision on 7th Pay Commision report implementation as around 47 lakh Central Government employees working in various sectors await their salary hike, which will have implications for government finances and inflation.

At a time when there are no conclusive increase in the private sector spending yet and the government also losing the benefits of low oil prices, it is facing a tough challenge in keeping up with the spending in public sector.

Reacting to a query, Finance secretary Ashok Lavasa said that a certain amount has been allocated to manage the impact of the pay commission award. But to speculate whether the amount is adequate enough, would be too early and premature.

Sources say, for this fiscal year the provision for hounouring the pay panel’s award is about Rs 54,000 crore whereas the outgo is estimated to be Rs 74,000 crore. Lavasa refused to comment on that saying no one knows as to what extent the government will accept the 7th Pay Commisions report.

Source : Financial Express

On 7th Pay Commission implementation, private investment, Air India and more, here’s what govt is mulling over

On 7th Pay Commission implementation, private investment, Air India and more, here’s what govt is mulling over

Besides the government staff, economic analysts are keenly awaiting when and how the Centre will implement 7th Pay Commission award, which has implications for government finances (with estimated outgo of Rs 74,000 crore in FY16) as well as on inflation.

Also, with private investments yet to show decisive signs of picking up, the government has the difficult task of keeping the tempo in public spending, especially capital investments, at a time it is losing the benefits of low crude oil prices.

Finance secretary Ashok Lavasa speaks on these issues in an interview to FE’s Prasanta Sahu. Excerpts.

GDP growth in FY16 was put by the Central Statistics Office at 7.6%, with the growth in the last quarter coming in at 7.9%. Private consumption has been the growth driver. Despite the efforts by the government, private investors are yet to shed their diffidence. Among infrastructure sectors, highways, railways etc. have seen a turnaround but mainly because of government investment. How far is this model sustainable given the Centre’s (limited) fiscal capacity?
Many infrastructure projects, in which private sector has been involved, have started moving. In highway sector, for example, the hybrid annuity model has started attracting investors. As we go forward, we feel that the initiatives that have been taken by the government – to improve the ease of doing business and integrate various clearances – would give a push to private-sector investments. In infrastructure sectors, where the government plays a key role in awarding contracts etc, we are seeing positive results too. If all the factors are favourable, the GDP growth could be close to 8% this year.

The questions about GDP data refuse to wither away. Manufacturing GDP growth and the IIP (industrial production) data aren’t quite compatible, even if one considers the fact that apart from output, value addition is now being captured more efficiently.

The Q4 results of some of the major companies show that their EBITDA has increased. The variation between manufacturing growth (9.3% in FY16) and IIP (2.4%) was mainly due to the fact that some sectors did well while some did not.

How important are lower interest rates in reviving demand?
I think it’s a question of giving a boost to demand. Sometimes people may have more expectation than what RBI could do (in terms of lowering rates). The RBI has had to consider various factors and take a considered view. It is not possible to please all people all times. It is fair to expect that whatever lowering (of rates) has been done by RBI, finds an expression in the retail lending rates. I think the governor is right in saying full transmission has not happened of the central bank’s (cumulative 150 bps) rate cut since January 2015.

What will be the guiding framework of the “prospective planning” that will replace five-year Plan?
We could divide it into three parts: the period till which one can have some predictability on availability of resources, that will be, say, a three-year action plan. Beyond this, there will be medium-term (seven-year) Plan. Besides, there can be a prospective plan for theb period till 2030. In the prospective plan, what you already have is sustainable development goals, which are part of the international commitments. Niti Aayog will look at integration of issues and prospective planning while department of expenditure will make the fund allocations for various programmes.

Will substantial additional provision be needed to meet the Pay Panel-related outgo in FY17?
It will be too early and premature to say whether budgetary provision is not adequate or not. No one knows to what extent the government will accept the Pay Commission’s report. But, there is a provision in the budget to take care of the impact of the pay commission award (According to sources, FY17 budget has provision of about Rs 54,000 crore for honouring the pay panel’s award, but Lavasa refused to comment on this ).

Will Niti Aayog’s reported suggestions on strategic disinvestments in a clutch of PSUs including Air India be taken forward this year?
We haven’t so far received the recommendations you are referring to. We have to explore all forms of divestment and strategic sale is of course one of them. The Department of Investment and Public Asset Management will be looking at all possibilities and deciding on which unit to be put on privatisation or disinvestment or strategic sale mode.

Is there any move to monetise surplus land with defence, railways and ports bodies?
This is not to be done as a central government policy. The railways have been trying to monetise land. Certainly, this is one source of revenue, but it may be not a very significant source. Whenever an entity decides to take up any piece of land for monetisation, it has to consider all the legal issues, physical condition, its own plans of utilising and ultimately, if there is a market for that (in case of sale/leasing out).

Source: FE