The Union Cabinet on Wednesday approved recommendations of the 7th Pay Commission for higher allowances. The move, which also takes into account house rent allowance (HRA), is expected to benefit approximately 50 lakh employees of the central government as well as defence personnel.
The revised rates are expected to be effective from 1 July 2017.
The move comes over a year after the Narendra Modi-led cabinet approved earlier recommendations of the commission, leading to a 14.27 hike in basic pay of central government employees.
After protests against the commission's recommendations on allowances, a committee was formed under Finance Secretary Ashok Lavasa, which submitted its review to Finance Minister Arun Jaitley on 27 April.
Speaking to the press at a conference in New Delhi, Jaitley said:
Jo Pay Commission ke sujhaav thay karmacharion ke paksh mein unko sweekaar kar ke unmein sudhar kiya gaya (the recommendations in favour of the employees have been improved and approved).
In-Principle Approval for Disinvestment of Air India
Jaitley added that the cabinet has given "in-principle approval" for disinvestment of Air India. A group will be set up to finalise details of the disinvestment.
The current administration has been looking to privatise the national carrier, which has been incurring losses for a while, and was rescued in 2012 with $5.8 billion in government funding.
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