Government has decided to pay its employees arrears arising from implementation of the 7th Pay Commission recommendations in one go in August salaries. The government has already notified the 2.57-time hike in basic salary of one crore government employees and pensioners as per the 7th Pay Commission recommendations. The pay hike has been made effective from January 1, 2016.
In an instruction, the Finance Ministry also said that the revised pay structure effective from January 1, 2016, would include the Dearness Allowance of 125 per cent provided in the pre-revised pay structure. The rate of the first installment of DA under revised pay will be announced later. "The arrears as accruing on account of revised pay consequent upon fixation of pay under CCS (RP) Rules, 2016 with effect from January 1, 2016, shall be paid in cash in one installment along with the payment of salary for the month of August, 2016, after making necessary adjustment on account of GPF and NPS, as applicable, in view of the revised pay," a finance ministry statement said. In order to expedite disbursal of arrears, the instructions said the "arrear claims may be paid without pre-check of the fixation of pay in the revised scales of pay."
However, it added, that the facilities to disburse arrears without pre-check of fixation of pay will not be available for those public servants who have retired, resigned or dismissed after the date of implementation of the Pay Commission recommendations.
The minimum pay in central government with effect from January 1, 2016 will now be Rs 18,000 per month, up form Rs 7,000 per month. At the highest level of Cabinet Secretary, the salary would go up from Rs 90,000 a month to Rs 2.5 lakh. There shall be two dates for grant of increment - January 1 and July 1 every year - instead of the existing July 1 only. The instruction further said that Income Tax would be deducted before payment of arrears.