Paying for the pay raise - (23 Nov 2015)
The Ministry of Finance released the Report of the Seventh Central Pay Commission, proposals of which are expected to come into effect from 1 January, 2016. Recommendations of the Commission enhance the salaries, allowances and pensions of nearly one crore current and former government employees by about 24 per cent. The pay raise is estimated to result in an additional Rs. 1,02,100 crore expenditure for the government annually, or over 0.65 % per cent of the nation’s GDP. The Report also envisions a shift from the present system of pay bands and grades, to a new ‘pay matrix’; introducing ‘Performance related Pay’ benefits; streamlining processes for CGHS beneficiaries to avail of the scheme outside of the CGHS area; and a reduction in the number of allowances currently paid out. The Report is expected to domino pay raises in public sector undertakings and also for State government employees.
In other news, the Union Cabinet approved the Finance Minister and External Affairs Minister to accept bilateral aid from additional countries. The Ministers are empowered to accept assistance from the European Commission and European Union countries not part of the G8. Amongst the conspectus of conditions, the loans must be worth a minimum of $1 billion.
India is also set to become the second largest borrower of the Asian Infrastructure Investment Bank, a Chinese initiative to improve access to resources for setting up infrastructure and sustainable development projects in Asia. With the ratification and submission of the Articles of Agreement approved by the government, India is set to join nearly 60 other nations that have signed up to draw from or support the Bank. The AIIB is seen as China’s response to the United State of America’s renewed push for influence in South and Far East Asia, and as an alternative to mainstays World Bank and International Monetary Fund.
Relevant : Highlights of Recommendations of Seventh Central Pay Commission MANU/PIBU/1550/2015
AIIB Articles of Agreement MANU/PIBU/1546/2015
Modified guidelines for bilateral Official Development Assistance MANU/PIBU/1547/2015
Tags : SEVENTH PAY COMMISSION AIIB BILATERAL ASSISTANCE
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