Higher Allowances: Central government employees have no option but to wait for cash flow to ease

New Delhi: The central government wants to announce higher allowances under 7th Pay Commission award for its 48 lakh employees and 52 lakh pensioners, after taking the steps to ease the cash flow, that has been a major problem ever since demonetisation was announced for higher allowances announcement, official sources said.

The hike in basic pay without allowances is not helpful for maintaining central government employees living standard, Finance Ministry sources told on Friday.

They had also said the allowances of government employees besides basic pay should increase which would give them some financial comfort, a step they had hoped might be taken after next budget, when the cash crunch would ease.

They added that the decision on higher allowances to push since getting of payments to made ease and without facing cash crunch. Hence, the Finance Ministry felt it would be wiser to announce of higher allowances when the cash flow to ease.

In the current financial year, the government has given higher basic pay with arrears, effective from January 1, 2016 to its employees on the recommendations of the 7th pay commission but the hike in allowances other than dearness allowance referred to the ‘Committee on Allowances’.

It compelled the the central government employees to get the allowances according to the 6th Pay Commission recommendations until issuing of higher allowances notification.

“The committee on Allowances headed by the Finance Secretary Ashok Lavasa has finalized the report on the allowances in October but the government don’t want to announce it now, so the government gave extension the committee till February 22, 2017 to submit the report on higher allowances for getting normalized the cash crunch position, ” the Finance Ministry sources said.

They also added that Finance Minister Arun Jaitley may announce the higher allowances in his budget speech for 2017-18.


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