7th Pay Commission report: Financial implications

Zee Media Bureau

New Delhi: The total financial impact of the 7th Pay Commission's recommendations in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the ‘Business As Usual’ scenario.

Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs 29,300 crore and increase in pension would be Rs 33,700 crore.

Out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.

In percentage terms the overall increase in pay & allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 percent. Within this, the increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent.

The total impact of the Commission’s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in case of 6th Pay Commission.