7th Pay Commission: Enhanced allowances with arrears to be paid in January

New Delhi: The government is going to pay of enhanced allowances to its 4.8 million central government employees according to 7th Pay Commission recommendations in January along with five months arrears, when situation will return to normalcy after cash crunch period.

The payments will be made after cabinet nod following the the committee on allowances report, the finance ministry source said.

The government has to pay the arrears of enhanced allowances this time because the enhanced allowances under recommendations of 7th Pay Commission have not been paid in August when the pay hike and its arrears were paid, he added.

The committee on allowances, which was set up in July this year on the direction of the cabinet, is looking into the provision of allowances other than dearness allowance under the 7th Pay Commission recommendations as the pay commission had recommended of abolishing 51 allowances and subsuming 37 others out of 196 allowances.

The committee met up with the deadline of four months given to it by the cabinet to submit the report, the official revealed.

We are ready to submit our report, when the Finance Minister Arun Jaitley calls up, the committee on allowances head Finance Secretary Ashok Lavasa said recently.

Prime Minister Narendra Modi scrapped Rs 500 and Rs 1,000 notes, which accounted for 86% of all cash in the economy, in a move to catch out Indians with black money, earned by corrupt means or evading taxes. But a bumpy rollout of the new currency has seen millions of people line up outside banks and ATMs.

The situation is worse in in all India. There is an acute shortage of cash supply. Dirty, soiled and non-issuable notes are also being re-circulated.

So, people continue to suffer after demonetisation from November 9 on account of cash crunch and it compels the Finance Minister Arun Jaitley to keep in abeyance the enhanced allowances till things normalize and it is likely to implement from January next with arrears, Finance Ministry official today told on condition of anonymity.