Seventh CPC Update : 30% hike in pay, 4 times G.P. on the cards

Seventh CPC Update : 30% hike in pay, 4 times G.P. on the cards

The Seventh Pay Commission may present its report to the government by August so that salary hike can be implemented from January 2016

 The Seventh Pay Commission may recommend a 2-3 times hike in government salaries from 2006 levels, a move which may spread cheers among civil servants but increase the stress on the fisc.

 Sources told Bloomberg TV India that Seventh Central Pay Commission (CPC) was considering mega give-away to the government employees. When the government implements the CPC mandate hopefully from January 2016, salary scale may double or treble from what it was in 2006, an official said.

 On an annual basis, the hike may be close to 30 per cent as consecutive hikes in dearness allowances has already raised the salary levels of government staff.

 Sources said there is likely to be a four-

fold hike in the grade pay. In the lowest 

salary band, the grade pay is likely to go up from Rs 1,800 per month to Rs 7,300. In the higher bracket, it may go up from the 

current Rs 12,000 to Rs 50,000.

 Historically, government salaries have almost trebled in every decade. The sixth CPC suggested 3 times increase in salariesfrom that of fifth CPC levels--it was 2.6 times for lower grade officials and slightly above three times for higher grade staff. The increase in salary during fifth CPC was 3-3.5 times the fourth CPC levels.

The previous UPA government set up the Seventh CPC headed by Justice AK Mathur in February 2014 and promised to implement the salary hike from January 2016. The Narendra Modi government may stick to the January deadline. The Seventh CPC may present its report to the government by August, sources said.

 North Block officials say the wage bill in the next financial year may see a 30 per cent hike on the back of Pay Commission recommendation, throwing up a huge challenge in the face of the fiscal consolidation roadmap.

 In the case of the sixth CPC, the government expenditure increased by about Rs 22,000 crore during FY09—Rs 15,700 crore on the general budget and Rs 6,400 crore on the rail budget. Arrears amounting to Rs 18,000 crore were distributed in two years—40 per cent in FY09 and 60 per cent in FY10.

 The fiscal implication of sixth CPC coupled with fiscal stimulus in the form of higher spending and tax cuts after the Lehman crisis, doubled the Centre’s fiscal deficit to 6 per cent in FY09 and from less than 2.7 per cent in FY08.

bank debt

Banks had also recast the Rs 7,500-crore loan of Pipavav Defence & Offshore Engineering, now controlled by the Anil Ambani group, in March this year. Jaypee Infratech, Adani Power and Uttam Galva Metallics also managed to obtain the approval of lenders to restructure their loans worth Rs 25,000 crore under the 5:25 scheme allowed by the Reserve Bank of India.

While Essar Steel has approached banks for a recast of loans worth close to Rs 12,000 crore, Essar Port has also sought a Rs 6,000 crore recast, bankers say. Last week, banks approved the restructuring of the Rs 35,000 crore loan of Bhushan Steel.

Debt recast plans of 285 companies — including HCC, Gammon and ABG Shipyard — for Rs 2,86,505 crore are currently being implemented, says the corporate debt restructuring (CDR) cell of banks.

Unlisted RGTIL, with a debt of Rs 16,010 crore at the end of March, 2015 (Rs 16,357 crore in the previous year), has quietly got the approval from lenders to change the repayment conditions. “The company has obtained sanctions from banks for rescheduling the principal repayment of the rupee term loans till 2030-31 as against the current repayment schedule over next four years,” RGTIL managing director RK Dhadda said in a statement to the National Stock Exchange.

“The continued decline in natural gas production in the KG-D6 block and consequent lower pipeline capacity utilisation of the company has resulted in the company incurring losses and erosion of net worth since FY12,” Dhadda said.

The RBI had complained that “restructuring is resorted to liberally in case of the industrial sector (particularly large industries — 9.3 per cent of advances), while smaller borrower accounts such as agriculture (1.45 per cent) and micro and small enterprises (0.94 per cent) see less of restructuring.” Gross NPAs of PSBs as on March 2015 stood at 5.17 per cent while the stressed assets ratio (which include NPAs and restructured loans) stood at 13.2 per cent (or overRs 7,12,000 crore), which is nearly 230 bps more than that for the system, according to figures released by the RBI. Many of the restructured loans —165 firms with a debt of Rs 56,995 crore — have not worked with nearly half of the failures coming in 2014-15.

Bankers were rescheduling stressed loans under the corporate debt restructuring (CDR) route till March 31, 2015. After it was shut from April 1, corporates are now lining up under the 5:25 flexible structuring scheme. Here, lenders are allowed to fix a longer amortisation period for loans to projects in infrastructure and core industries, for say 25 years, based on economic life or concession period of the project, with periodic refinancing in every 5 years.

10th BP latest news

As per information received from source  UFBU  finalized pay structure  for  clerical cadre and  substaff.

Starting basic will be  for  clerical  13075  to  40710  and  increament amount  will be 665  to 1310  with total 27 increament.

Incase of  substaff   basic will be  9565  to 23135  with increament amount  325 to 655 total 27 increament. 

HRA    metro  15%   capital town 12.5%  and  rest  11%

Transport allowance   will be  Da  link and   around 1000/ p.m