Finance Ministry sets up Cell to implement 7th Pay Panel recommendations

New Delhi: The Finance Ministry has set up an 'Implementation Cell' to give effect to the recommendations of the Seventh Pay Commission which are eventually accepted by the government.

Headed by a Joint Secretary level officer, the Cell has been set up in the Department of Expenditure for a period of one year with effect from November 20, 2015.

The Cell would process and implement the "accepted recommendations of the Seventh Pay Commission", said an office memorandum.

Besides Joint Secretary, the Cell would have nine officials and staff, including a Director level officer and two under-secretary level officers.

The Seventh Pay Commission, headed by Justice A K Mathur, had on November 19 submitted its report to Finance Minister Arun Jaitley.

It had recommended a 23.55 percent increase in salary, allowances and pension of government staff, involving an additional outgo of Rs 1.02 lakh crore in 2016-17.

The recommendations that will benefit 47 lakh central government employees and 52 lakh pensioners, will lead to an additional outgo of Rs 73,650 crore from the Union Budget and Rs 28,450 crore from Railway Budget.

The new pay scales, subject to acceptance by the government, will come into effect from January 1, 2016.

The Centre has expressed confidence that the implementation of the recommendation will not lead to a breach in the fiscal deficit targets.

Minister of State for Finance Jayant Sinha had said: "We are confident that we will be able to stick to fiscal consolidation roadmap even with what the Pay Commission recommended. The roadmap that we have put together is taking into account what the impact of the Pay Commission would be".

The government had unveiled a fiscal consolidation roadmap in Budget under which fiscal deficit was to be brought down to 3.9 percent of GDP in 2015-16, 3.5 percent in 2016-17 and 3 percent by 2017-18.

Fiscal deficit in 2014-15 was 4 percent of GDP.