If the extension of the rural employment guarantee scheme across the country was for the mazdoor and the Rs 71,000 crore loan waiver scheme to bail out the kisan in distress, the government today reached out to 50 lakh karamcharis by accepting recommendations of the Sixth Central Pay Commission.

In an Independence Day bonanza for government employees, as first reported by The Indian Express, the Cabinet announced a jump in allowances and salaries beyond what was recommended by the pay panel to ensure that each employee gets a minimum 21 per cent increase over the current salary. Most demands put forward by Defence forces have also been met in the revised pay structure.

The wage hike would ensure that minimum emolument of a government employee would be in excess of Rs 10,000 per month. The modifications made by the Cabinet in the pay panel recommendations would increase the financial implication for the Centre by Rs 17,798 crore annually and the arrears — to be given with effect from January 2006 — would cost Rs 29,373 crore. Modifications made by the Cabinet would mean an extra burden of Rs 11,000 crore for the government.

The new salaries would be given to the employees beginning September and arrears (from January 2006) would be given in two installments — 40 per cent this fiscal and 60 per cent in 2009-10. The arrears would be given in cash to employees just before the Diwali festival season.

The annual increment rate for all employees has been increased by the Cabinet from 2.5 per cent (recommended by the pay panel) to 3 per cent.

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