7th Pay Commission, as seen by the economists
“All the Economists and Analysts, and not just in India, is discussing the 7th Pay Commission.”
Last week, Neelkanth Mishra of Credit Suisse said that there are chances of 40% increase in salary. He also remarked that post-7th Pay Commission, the financial status of Central Government employees will grow high enough to afford a car.
Yesterday, an article in the International Business Times analyzed the role of the Pay Commission in the economic development of India. The article had expressed an estimate on how substantial the hike in salaries would be following the 7th Pay Commission recommendations. Bank of America has estimated a 15% hike in the salary; Religare fixes the hike at between 28 to 30%, and Credit Suisse has marked it as 40%.
Since the Pay Commission has a huge influence on the country’s economic development, financial experts are keenly observing the 7th Pay Commission. This is why everybody is curious to know what the recommendations have in store for the country.
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According to the article, the 6th Pay Commission gave a hike of 35% and more than 30 months arrears to the employees. As a result, the robust demand for consumer discretionary products that resulted in sustained stock performance over 3-5 years.
The report will directly impact 50 lakh Central Government employees (including 15 lakh armed forces personnel), and more than 1 crore state government employees. Also, the report would affect more than 30 lakh pensioners. The Bank of America estimates the salary hike to be at 15% and analyst expectes it to be the range of 15to 40%.
The article made it clear that the 6th Pay Commission gave the kind of economic growth among Central Government employees that was not seen in the past 50 years.
The big question justify now is – will the 7th Pay Commission give 35% hike, like the 6th Pay Commission did?