The Union Cabinet approved the recommendations of the Sixth Pay Commission on Thursday, giving a hefty pay raise to around 40 lakh organized and vocal government employees.
The pay raise would be effective from January 1, 2006. However, the arrears of 32 months would be paid in two parts, 40% in the current fiscal year and the remaining 60% in 2009-10. The allowances would be paid post facto with effect from September 1.
The financial implication in 2008-09 on account of the implementation would be around Rs 15,700 crore on the central budget and Rs 6,400 crore on the railway budget. The final package marks a rise of 21% over what the pay panel had recommended.