The Maharashtra cabinet on Thursday cleared the implementation of Seventh Pay Commission for the state government employees with effect from January 1, 2016. This will mean a 23% hike in the salaries of around 20 lakh employees.
As per the cabinet decision, an additional ₹24,485 crore will be paid in year 2019-20 in the form increased salaries, pension, HRA and arrears.
Arrears from 2016
The employees will get arrears from January 1, 2016 to December 31, 2018 which will cost ₹38,655 crore and will be paid from the next fiscal in five instalments over the next five financial years, the cost in each year being ₹7,731 crore. For pensioners the amount will be paid directly, but for those who are working, it will be credited to their provident fund and cannot be withdrawn for at least two years.
For the remaining months of the current fiscal, the government will be paying extra ₹1,100 crore as increased salary and ₹440 crore HRA every month. From 2019-20, the government will be spending around 38% of the total receipts on salaries and pensions.
Finance Minister Sudhir Mungantiwar said that the State government had appointed a committee under retired additional chief secretary K.P. Bakshi to study the Centre’s module of salary grades. “Based on the report the State cabinet has sanctioned to implement the changes in salary grade, pension, HRA of the employees,” he said.
The move is seen as the government’s effort to woo the middle-class in an election year as this demand has been pending for the last two years. Mr. Mungantiwar said that the government is positive about demands of each and every employee and each section will get its due.
In the case of very old pensioners, instead of a blanket increase of 10%, the State government has made five categories (see box).
In the case of HRA payment also, there are three categories — X (MMRDA, PMRDA), Y (Big cities) and Z (Rest) — with a payment of ₹5,400, ₹3,600 and ₹1,800 respectively.