RAY OF HOPE IN 78.2% IDA MERGER CASE.

11-4-2016

GOOD NEWS 78.2 % CABINET NOTE

11/04

IT IS LEARNT THAT THE CABINET NOTE ON 78.2 HAS BEEN CLEARED BY SECRETARY TODAY

TAKE-HOME SALARY WILL BE LESS

10/04

A news item appeared in media is reproduced hereunder. All central government staff (except perhaps the Group D) will get very negligible amount as hike in their salary if the proposal is implemented. At the same time, all deductions will be based on the full hike. Net result will be that the "take-home" salary will be lesser than whey they get now. somebody concerned may please calculate and tell the fact.

News Item

7th Pay Commission – 50% of Salary Increase Could be by way of Bonds – Increase in government employee wages and pension expenditure on account of seventh pay commission recommendations is not fully provided for in the Budget.

The govt is considering a proposal under which 50% of of higher income staff under the 7th Pay Commission will be compulsorily invested in bank bonds. The proceeds will be used to recapitalise banks without additional pressure on the fiscal.

While this will result in less cash in the hands of higher-income employees, as a sweetener they will get income tax rebate on the amount invested. Those wanting to invest more than 50% to save tax will be allowed to do so. The Bank Recapitalisation Scheme, as this proposal is being called, will be voluntary for employees with lower salaries (those in the Rs 5,200-20,200 bracket) and pensioners.

A finance ministry official confirmed that preliminary discussions around this proposal were held at a meeting on Thursday, but no decision on its implementation was taken. “The issue was discussed. We are looking at all options,” he said.