Seventh Pay Commission's Bonanza Will Cost Rs 1 Lakh Crore Per Year

The Seventh Pay Commission has proposed a 23.5 per cent hike in salaries of central government employees. Pensioners will get 24 per cent hike if the Cabinet okays the recommendations of the pay commission. The proposals are likely to be made effective January 1, 2016.

The central government will have to incur an expenditure of Rs 1.02 lakh crore for enhanced salaries and pensions per year. Of this, Rs 28,000 crore will go for salary hikes of railway employees. As a percentage of GDP, the hike in salaries and pensions will account for 0.65 per cent of the country's GDP.