Bonanza for Govt Employees

The Union Cabinet gave its approval for the implementation of the Sixth Central Pay Commission recommendations, awarding an average pay hike of 21% for Central Government employees. The Cabinet broadly accepted the recommendations of the Sixth Central Pay Commission with some modification. The new system of four Pay Bands with 20 Grade Pays recommended by the commission has been accepted with minor changes. The revised pay scales will come into force from January 2006 while the revised rates of allowances will be effective from September. The Government will adhere to FY09 budget targets, barring off-budget liabilities, Finance Minister P. Chidambaram said. The Centre has no plan to borrow more from the markets to pay for the higher salaries, expenditure secretary Sushma Nath said. Provision for the pay increase had been made in the budget for the year 2008-09, she said. FY09 Railway Budget will be impacted by Rs64.14bn, while the impact on general budget will be Rs157.17bn.