7th Pay Commission: For central government employees, no joy on August 15; here is what may be in store now

7th Pay Commission: Expectations were hyped up to the skies that there would be good news about a pay hike on this national holiday. However, Prime Minister Narendra Modi's Independence Day speech from Red Fort ramparts in New Delhi has brought disappointment for about 50 lakh Central government employees along with an equal number of pensioners as they had been waiting for an announcement related to hike in minimum pay and fitment factor beyond the 7th Pay Commission recommendations. Looking at good monsoon and positive economic factors as well as the looming elections, many believed that the announcement would come on this big day. 
 
The Prime Minister spoke about Indian economy's future growth and its becoming of a powerhouse in next three decades, but he avoided making any offer for the central government employees regarding their pay. 
 
This puts in perspective Minister of State for Finance P Radhakrishnan's comments, made months ago, when he said that there is no plan on the agenda of Prime Minister Narendra Modi government for a pay hike announcement. 
 
This comes in the wake of the Haryana government recently approving pay scale recommendations of teaching and non-teaching staff at the state universities and govt-aided colleges with effect from Jan 1, 2016. The Maharashtra government also announced salary hike under 7th Pay Commission from January 2019 for 17 lakh state employees and even announced a date for implementation.
 
In the wake of these developments, the Central employees too have been hoping for some positive news. However, the government can take such a decision anytime as it doesn't need to be on a special day. It can do so in a much more discreet way.
 
What may have tilted the scales against central government employees is that, earlier this month, RBI decided to increase the repo rate by 25 basis points to 6.5%. The reverse repo rate was hiked by RBI in an announcement after its three-day Monetary Policy Committee (MPC) meeting concluded. It had also made an observation that inflation rates have increased on account of implementation of 7th Pay Commission. The revised HRA structure came into place in July 2017 under the 7th Pay Commission.
 
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Currently, the Central government employees are getting basic pay according to the fitment formula of 2.57 of the basic pay. Fitment factor is a figure used by 7th CPC with which the basic pay in 6th CPC regime (i.e Pay in Pay band + Grade pay) is multiplied in order to fix basic pay in revised pay structure (i.e 7th CPC). Fitment factor formulated by 7th CPC is 2.57.