7th Pay Commission: Wait for higher allowances gets longer, Central govt to pay bonanza after Budget 2017-18

The suspense over the payment of higher allowances under the 7th Pay Commission ended on Tuesday with Central government saying the higher allowances will be paid after the Budget 2017-18.

By India.com News Desk | Published: January 2, 2017 

7th Pay Commission: Wait for higher allowances gets longer, Central govt to pay bonanza after Budget 2017-18

New Delhi, Jan 2: The suspense over the payment of higher allowances under the 7th Pay Commission ended on Tuesday with Central government saying the higher allowances will be paid after the Budget 2017-18. The ‘Committee on Allowances’ had got extension till February 22, 2017 to give its report on higher allowances, which suggested that the government will pay higher allowances as per the recommendations of the 7th Pay Commission after February. The government has decided to advance the date of Budget presentation by a month and present it on February 1. The government plans to complete the entire exercise related to Budget before March 31, after which it will pay the higher allowances under the 7th Pay Commission.

“Government is very pleased to pay the higher allowances to its employees after Budget,” a Finance Ministry official was quoted as saying by the Sen Times. “The acute cash crunch in banks and ATMs that prevailed for a month following the demonetization move of the government has eased from January 1, as the daily withdrawal limit from ATMs has been increased from Rs 2,500 to Rs 4,500. Hence, the Finance Ministry felt it would be wiser to announce of higher allowances after Budget,” the top official added.

The cash crunch post demonetisation drive affected the preparations of the government about payment of higher allowances as per the 7th Pay Commission recommendations. The government wanted to start payment of higher allowances under 7th Pay Commission for its 48 lakh employees and 52 lakh pensioners, but the cash shortage compelled the government to delay it.

The central government employees have been waiting for fatter allowance since July when the government issued the notification for the implementation of the 7th Pay Commission recommendations. The 7th Pay Commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances, however central government employees were unhappy with the move.

Until acceptance of higher allowances, under 7th Pay Commission, the allowances are now paid according to the 6th Pay Commission recommendations.