7th Pay Commission: ‘No’ further salary hike; allowances to be taxable for central government employees


The government has refused to meet the demand of central government employee unions who wanted the minimum pay to be raised from Rs 18,000 to Rs 26,000.

Certain unions of central government employees were demanding that the minimum pay be increased from Rs 18,000 – as recommended by the 7th Pay Commission – to Rs 26,000.  The government has said that there is no scope of any further revision of salaries.

Earlier, the government had said that it will consider this after evaluation by the National Anomaly Committee.

Even PSU employees were demanding that the minimum pay be raised to Rs 26000. The government has now said that even if the National Anomaly Committee recommends, there will be no further revision.

At the time of implementation of 7th Pay Commission, Finance Minister Arun Jaitely, had said that salaries of central government employees have to be respectable when compared to the private sector.

While the government has refused to increase the minimum salary, another disappointment for central government employees will be when allowances are brought under the ambit of income tax.  

The government has proposed imposition of income tax on the employees’ basic salary, bonus, and all other allowances in the Finance Bill 2017.

The government believes that if allowances for central government employees are not taxable, it will be discrimination against the private employees who have to pay taxes for allowances.

Central government employees argue that they have been paying tax on allowances and exemption was there only on a few allowances. It is like making them to pay tax on allowances that an employee gets for spending on works meant for the government.

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