7th Pay commission is not going to recommend lowering the retirement age

Media Reports says that 7th Pay commission is not going to recommend lowering the retirement age  will submit its report by the end of September

The Seventh Pay Commission, headed by justice A.K. Mathur, has sought a one-month extension from the finance ministry and is preparing to submit its report by the end of September. The commission is unlikely to recommend the lowering of the retirement age as rumoured earlier or push for lateral entry and performance-based pay.

The commission, set up once in every 10 years to review pay, allowances and other benefits for central government employees, was appointed by the previous government on 28 February 2014 and was asked to submit its report in 18 months, which falls on 31 August.

“There are some data points that are missing, which we hope to get by this month end. We are trying to submit the report by 20 September,” an official of the commission said, speaking on condition of anonymity.

The Sixth Pay Commission had submitted its report a little ahead of its deadline on 24 March 2008. The revised pay scales were implemented retrospectively starting 1 January 2006, while recommendations relating to allowances were implemented prospectively.

The finance ministry apprehends that salary and pension expenditure will both rise by around 16% in 2016-17 as a result of the implementation of the Pay Commission recommendations. This may allow capital expenditure to grow by no more than 8% during the year, leaving little room to aggressively push for an infrastructure build-up.

“The Pay Commission impact may have to be absorbed in 2016-17. The phase of consolidation, extended by one year, will also be spanning out in this period. Thus, in the medium-term framework, the fiscal position will continue to be stressed,” the finance ministry said in the 2015-16 budget presented in February.

The official cited earlier said the Pay Commission report needs to be effective from 1 January 2016, or by April 2016 at the latest.

“It will be the government’s prerogative when to implement it. But beyond 1 January 2016, there will be arrears. But then, the government will be subject to criticism. Earlier, they had hidden behind Pay Commissions giving late reports,” he added.

However, the official said the commission is likely to maintain the status quo on the retirement age of central government employees, currently 60 years. “We are not going to either recommend lowering or raising the retirement age. If we lower the age limit, the pension burden will bust the government’s medium-term fiscal targets,” he added.

Asked whether government has sent any directives to the commission on the kind of hike it can afford, the official said the message it has got broadly is to keep the hikes low. “Merge the basic with dearness allowance, don’t stretch it beyond—that is the message. But that is a good message for the government to send. But there is no pressure otherwise. In fact, there is a lot of cooperation,” he said.

The official said merging basic pay with dearness allowance, which is mandatory, would itself mean a 155% rise for central government employees. “We have to decide how much to give above that. So, it will look good if you compare basic to basic,” he added.

On whether the commission will recommend performance-based pay bands, he said it will make some feasible recommendations, though he couldn’t guess if the government would accept them. The Sixth Pay Commission had also recommended performance-based pay revisions, but the government is yet to implement them.

“Eighty-eight percent of central government employees are industrial and non-industrial workers working with railways, post, paramilitary and army. So, performance-based pay revision is the wrong instrument for them. Biggest growth in government services is in paramilitary forces, where staffs in Central Reserve Police Force and Central Industrial Security Force have gone up by 75-80% in the last 10 years. By the time we have dealt with them, the bureaucracy is an afterthought. It does not affect anything,” he added.

READ ALSO : 7th Pay Commission Important News

D.K. Joshi, chief economist at rating agency Crisil Ltd, said the government is expected to be restrained in its pay hikes this time around, given the low inflation level and tepid growth momentum. “The last two Pay Commissions had significantly bumped up demand and fiscal deficit. But the government is unlikely to be populist this time. It has already showed restraint in the hike in minimum support prices for farmers,” he said.

However, Joshi said the Pay Commission will have a permanent income effect as well as a one-time impact through the payment of arrears, which will lead to increase in demand for consumer durables.

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9 thoughts on “7th Pay commission is not going to recommend lowering the retirement age”

  1. Its not a fair decision for the fourth class employees because a fourth class employee just in a age of 51 or 52 after his 33years service completion and 51 or 52 age is not a age for retirement.He has so much burden at the age of 51 or 52 like daughter’s marriage,built of house etc.so a sudden retirement without a mentally preparation is very unfair.I hope govt. will take a fair decision.

  2. ye bahut galat proposal hai bechara 4th class ka karamchari ish time na baccho ko settle kr pata hai na Ghar bana pata hai kya ishko aache din aana bolte hai ya ek chote karamchari k aur bure din laye ja rhe hai plz jara chote karachariyo k bare m b socho …….

  3. The proposal to retire after 33 years of service is a excellent one to bring efficiency by inducing fresh blood in the system. In Industrial ans paramiltary jobs one requires young legs for achieving higher efficiency which by the present retirement criteria can not be achieved.

    In private companies you hardly find any aged person while govt companies are full of them whose only job is to take meetings and there are very few people to implement.

    Govt companies if wanting to compete with private sector should immediately implement the 33 years work criteria especially for Industrial & bank jobs.

  4. peri ravi kumar

    lowering the retirement age shall not – at all – pose its impact upon the government exchequer because, if government did so, it shall NATURALLY gives boost to government’s physical liquidity,

    in other words, if a person retires prior to 31/12/2015 his gratuity and pension and all other retirement benefits shall goes up if he retires after implementation of 7th CPC

  5. रिटायरमेंट को नहीं घटाना एक अच्‍छा कदम है। सरकार को अथवा सीपीसी को ऐसे प्रगतिबाधक कदम के बारे में सोचना भी नहीं चाहिए। 33 साल की सेवा तो छोटे लेवल के कर्मचारियों की ही जल्‍दी पूरी होती है, 20-22 साल की उम्र में कोई डॉक्‍टर, वैज्ञानिक या इंजीनियर तो लग नहीं सकता। 53-55 साल की उम्र में परिवार की अनेक जिम्‍मेदारियां बनी रहती है मसलन बच्‍चों का कैरियर,उनकी शादी, मकान आदि। रिटायरमेंट उम्र 33 साल की सेवा होने पर अधिकतर छोटे स्‍तर के कर्मचारी सडक पर आ जायेंगे। रिटायरमेंट आयु कम नहीं करने का कदम स्‍वागत योग्‍य है। और जब एक ओर जीवन प्रत्‍याशा बढ रही है तो लोगों को समय से पहले निठल्‍ला बनाने की कोई जरूरत नहीं है।

  6. Retirement age should be compared with the other developed country in the world in 7th CPC.

  7. Retirement age is all way in correct to 60year because if implementation of 33yrs of service, its will left with the expertise which will hamper the policy revision. It will be better that eradication of personnel from services those are not getting promotion in time, having health problems & not fitt for his duty. An initial step to be taken to same the precious time and high earning of Indian people. There may be no macp system as its brought down the morale of person those are promotted and his seniors still not protmoted. Its brought down efficieny level of juniors.
    Thank u

  8. I hope this is true…retirement age on completion of 33 years of service or at the age of 60 years is a very ridiculous move…if it will be implemented to new job holder then it can be justified…but if it will b implemented to existing job holder it will b injustice to them. Because earlier maximum people were working from the age of 18. They cant be retired by the age of 50 or 51. this is not the age of retirement…and also they are not mentally prepared…maximum people have so many burden at the time of retirement…So how can they manage to do everything at a sudden moment…this will b really injustice to them…If govt really wants to give chance to youth generation, they should think a better idea than this…
    I am a student..I am trying to get a job…but that doesnt means i can get a job after retirement of all d senior n qualitative person. New generation cant handle all d things in a qualitative manner..we need time..and another thing is, suppose i got job and i know that i will get retired after 33 years of job completion. Then somehow i can manage n i will arrange my retirement plan..like people joined after 2004 dont have pension scheme. and they know how to do n wat to do after retirement. I hope govt will take a fair decision.

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