Friday, November 20, 2015

Tuesday, July 28, 2015

7th Pay Commission Likely to Hike Salaries By 40%: Credit Suisse

7th Pay Commission Likely to Hike Salaries By 40%: Credit Suisse

The 7th Pay Commission is likely to raise the salaries of government employees by up to 40 per cent, said Neelkanth Mishra, India equity strategist of Credit Suisse. The Pay Commission will submit its recommendations in October and it will be implemented by next year.

"As the Pay Commission numbers come through there could be a 30-40 per cent increase for each  individual. It won't be as big as last time because it was driven by a lot of arrears but definitely a large number of government employees will come into the pay bracket which can afford to have, for example,  four-wheelers," he said in an interview with NDTV.

Credit Suisse says about one-third of India's middle class is employed by the government and as the 7th Pay Commission comes through, there will be an improvement in discretionary spending.

"In Tier 3, Tier 4 towns where government employees are 50-60 per cent of the middle class, it is very likely that real estate markets will take off again," Mr Mishra said.

Once the Pay Commission submits its recommendations in October, it will take 3-6 months for the Centre and the states to announce its implementation, Credit Suisse said.

Gujarat and Madhya Pradesh have already indicated that they are going to implement the 7th Pay Commission recommendations from January 1, 2016, he said.

As clarity emerges on the 7th Pay Commission, consumption will see an uptick and that could act as a stimulus to the economy, the brokerage said.

However, Mr Mishra struck a note of caution. "Clearly if you see a third or 35 per cent of your middle class getting a 40 per cent or 30 per cent jump in compensation in one shot, the fears of inflation will rise." Expectations of rate cuts can get pushed out and some possible fiscal pressures can emerge, he warned.  

 Story first published on: July 28, 2015 16:14 (IST) at

Thursday, April 16, 2015

7th pay revision commision will give huge money to govt employees - Aaj Tak

Saturday, February 28, 2015

The Seventh Pay Commission is expected to submit its recommendations by August 2015

New Delhi (27/02/2015 Times of India): 

The 14th Finance Commission has suggested linking pay with productivity with a focus on technology , skills and incentives, a move aimed at raising the productivity of government employees.
The panel has recommended that in future additional remuneration be linked to increase in productivity.

The Seventh Pay Commission is expected to submit its recommendations by August and it has been asked to look at the issue of raising productivity and improving the overall quality of public services in the country.

The Sixth Pay Commission had also said that steps should lead to improvement in the existing delivery mechanism by more delegation and de-layering and an emphasis on achieving quantifiable and concrete end results. Emphasis is to be on outcome rather than processes, it had said. The earlier Pay Commissions had also made several recommendations to enhance productivity and improve administration.

The 14th Finance Com mission's recommendations assume significance at a time when the Narendra Modi government has focused its attention to improve the delivery of public services and is taking steps to use technology to improve efficiency.

The Union government has taken several steps to shore up the bureaucracy and has changed the way attendance is measured in government offices.

“Further we recommend that Pay Commissions be designated as Pay and Productivity Commissions with a clear mandate to recommend measures to improve productivity of an employee,“ said the 14th Finance Commission headed by former Reserve Bank of India Governor Y V Reddy.

The Reddy panel said productivity per employee can be raised through the application of technology in public service delivery and in public assets created.

“Raising the skills of employees through training and capacity building also has a positive impact on productivity. The use of appropriate technology and associated skill development require incentives for employees to raise their individual productivities,“ the Reddy led panel said.

“A Pay Commission's first task, therefore, would be identify the right mix of technology and skills for different categories of employees.The next step would be to design suitable financial incentives linked to measureable performance,“ the panel said. An internal study by the panel showed the expenditure on pay and allowances (excluding expenditure for Union territories) more than doubled for the period 2007-08 to 2012-13 from Rs 46,230 crore to Rs 1.08 lakh crore.