The government on Wednesday announced the constitution of the Seventh Pay Commission to revise salary and pension for about 80 lakh staff and pensioners.

“Prime Minister Manmohan Singh approved the constitution of the 7th Pay Commission. Its recommendations are likely to be implemented with effect from January 1, 2016,” Finance Minister P. Chidambaram said in a statement.

The Congress and the employees union hailed the decision of the UPA-II government.

The union, however, demanded that the pay panel’s award be implemented with retrospective effect from January 1, 2011.

Commerce and Industry Minister Anand Sharma said: “It is the right of the employees to have the pay commission ...when the recommendations come, the government will be able to implement [them]. You do not do something for which you do not have money available.”

The setting up of the commission, whose recommendations will benefit about 50 lakh Central government employees, including those in Defence and Railways, and about 30 lakh pensioners, comes ahead of the Assembly elections in 5 States, including Delhi, Rajasthan and Madhya Pradesh, in November and the general elections next year.

The government constitutes the pay commission almost once in every 10 years to revise the pay scales of its employees and often these are adopted by the States after some modification.

The sixth Pay Commission was implemented from January 1, 2006, the fifth one from January 1, 1996, and the fourth from January 1, 1986.

“Except for 6th Pay Commission, all Pay Commissions are set up in third year of a decade... The government should attract the best of talent as its employees.”

Pay Commissions help in attracting and also retaining best available talent,” Congress general secretary in charge of Communication Ajay Maken commented on the microblogging site Twitter. “The NDA rejected the legitimate formation of the 6th Pay Commission in 2003. The Congress set up the 6th Pay Commission in 2005, now again the 7th CPC in 2013.”

Welcoming the announcement, president of the Confederation of Central Government Employees and Workers K.K.N. Kutty said: “We have a reservation. It should be implemented with effect from January 1, 2011 as in the case of Central PSUs whose employee pay scales are revised every five years.”

During discussions with the government, Mr. Kutty said the Confederation would press for merger of up to 50 per cent of dearness allowance with the basic pay, which was a prerequisite for setting up a pay commission. — PTI