Latest news from the 7th Pay Commission: Two important announcements regarding central government employees are expected to be made in the upcoming Budget 2023. The Union Budget for the fiscal year 2023-24 is scheduled to be presented by the minister of Finance, Nirmala Sitharaman, on February 1.
The first announcement is likely to provide some relief to government employees, while the second may pinch their pockets.
Seventh Pay Commission: Salary revision may be announced
The salary review of central government employees, which has been under discussion for a long time, is likely to be done through the adjustment factor in the next pay commission.
On the contrary, the government is of the opinion that the salaries of government employees should be increased every year instead of every 10 years.
Also Read: DA Increase: How Much Central Government Employees Will Get After 3% Lean Allowance Increase – Check The Calculation Here!
With a year to go before the formation of the 8th Pay Commission, the government could introduce a new formula for the review of employee salaries, according to the sources. And this annual salary increase phenomenon is expected to be included in the next budget.
7th Payment Commission: What will be the new formula?
Every 10 years, a new pay commission is formed to increase the salary of government employees based on the adjustment factor. This 10-year phenomenon deprives lower-level employees of a proper raise, unlike senior government officials.
Also Read: DA Hike: Good News for Central Government Employees as the Cariño Allowance Increase for 2023 Will Be Clarified on January 31
Therefore, the government is expected to focus on the formula given by the former finance minister, the late Arun Jaitley. In 2016, when passing the 7th Pay Commission (latest news from the 7th Pay Commission), Jaitley had said that the time had come to increase employee wages every year. This will benefit junior level employees.
Second big announcement for employees in the budget
Another big announcement about the Home Construction Allowance (HBA) for central government employees is also likely to come in the 2023 budget. Currently, central government employees can get this subsidy as a down payment from the government to build or repair a house.
Also read: What is the EPS-95 Pension Plan under EPFO? Check eligibility, benefits and the math behind the scheme
The employee can take an advance of up to Rs 25 lakh to build a house with this allowance. Instead, the government charges you interest.
Currently, the interest rate on the housing construction allowance is 7.1 percent, and this interest is likely to increase in the next budget. If the sources are to be believed, the HBA interest rate may be revised to 7.5 per cent and the cap will be raised to Rs 30 lakhs from Rs 25 lakhs at present.