6th Pay Commission: Pay scale for armed forces below officer rank

New Delhi, Sept 2, 2008: Following is the list of pay scale awarded by 6th Pay Commission for the three wings of the armed forces below the rank of officers.

Army

Existing Pay Scales
Rank	Group X	Group Y	Group Z
Sepoy	3600-70-4650	3250-70-4300	3050-55-3875
Naik	3700-85-4975	3425-85-4700	3150-70-4200
Havaldar	4150-100-5650	3600-100-5100	3250-85-4525
Nb Sub	5770-140-8290	5620-140-8140	5200-125-7450
Subedar	6750-190-9790	6600-170-9320	6170-155-8650
Sub. Maj.	7250-200-10050	6750-200-9550	6600-200-9400

Air Force

Existing Pay Scales
Rank	Group X	Group Y	Group Z
AC	3675	3250	3050
LAC	4025-60-4925	3650-60-4550	3080-60-3980
CPL	4150-70-5200	3900-70-4950	3200-70-4250
SGT	5000-100-6500	4320-85-5595	3775-85-5050
JWO	5770-140-8290	5620-140-8140	5200-125-7450
WO	6750-190-9790	6600-170-9320	6170-155-8650
MWO	7400-200-10200	6750-200-9550	6600-200-9400

Navy:

Existing Pay Scales
Rank	Group X	Group Y	Group Z
App/Seaman II	3200-60-3260	3325-60-3445	3050-55-3215
Art V/Seaman I	4150-70-4360	3650-60-4550	3080-60-3980
Art IV/ Ldg Seaman	4550-100-6350	3900-70-4950	3200-70-4250
Art III-I/PO	5120-100-7120	4320-85-5595	3775-85-5050
Chief Art/CPO	6000-125-8250	5620-140-8140	5200-125-7450
MCPO II	6750-190-9790	6600-170-9320	6170-155-8650
MCPO I	7400-200-10200	6750-200-9550	6600-200-9400

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6th Pay Commission proposals to result in CRR hikes: PNB

On Friday, some banking stocks rallied pretty hard on expectations that rates might be easing off.

However, KC Chakrabarty, CMD, Punjab National Bank, believes that if the Sixth Pay Commission�s recommendations are implemented there may be some more liquidity in the market, which would result in further CRR hikes. He also sees some repo rate hikes but does not see banks increasing interest rates immediately.

Excerpts from CNBC-TV18�s exclusive interview with KC Chakrabarty:

Q: What could we expect from RBI at the next meet, could we see any pullback in the stance that they have had so far?

A: I don�t think anything will happen. It is too early. If the recommendations of the Sixth Pay Commission are implemented, it will result in more liquidity being infused into the market. So, there maybe further CRR hikes to rein in this liquidity, but I don�t think rates are going to be eased off so early.

Q: Do you expect repo rates to go up from here because a lot of market participants feel there could be another 50 bps tightening of the repo rate?

A: It may happen, but this would not result in banks raising their interest rates. Banks have already factored in a repo rate hike. They need not go in for another interest rate hike for at least another 5-6 months. If there is a 25-50 bps repo rate hike, banks may not increase their lending rates immediately, but there may be a hike in deposit rates so as to encourage people to save in this difficult market.

Q: If deposit rates go up some more, do you expect some squeezing of net interest margins if you are not inclined to pass down those rates?

A: A 50 bps increase in CRR or a 25 bps hike in the repo rate will not affect margins by more than 10-15 basis points. We will be able to achieve our targeted net income growth despite the pressure. Banks may not unnecessarily tamper with interest rates at this juncture. However, if the CRR increases by another 100 bps, then we may have to rethink.

Q: There are some reports which suggest that the demand for housing sector has scaled back quite significantly. What kind of credit growth do you think banks can maintain? Will it get closer to the RBI�s target of 20% or will it remain above the 25% mark?

A: Credit growth has to come down. If banks are unable to achieve 20% credit growth, RBI should take Monetary measures to bring it down to that level. Credit growth should stabilize at around 20-21%. It may be little more than 20%, but it cannot be more than 25%.

Q: The bond market has moved quite interestingly. The bond yield went up to 9.5% and now the benchmark yield is down to 8.7%. What is that signalling and where do you think yields are headed?

A: I don�t think 8.7% on bond yields is sustainable with this interest rate structure. When bond yields had gone up to 9.5%, many investors built up their bond portfolio believing it was a good rate for the next 10-15 years. However, credit demand in the pipeline was a bit more and people therefore tried selling out. That is why this has happened.

Bond yields will stabilize around 9%. A correction in bond yields is not possible unless inflation comes down. (Courtesy: Moneycontrol.com)

Sixth Pay Commission: Notification issued

By Khabrein.Info Correspondent,

New Delhi, Aug 30, 2008: Finally the government today issued notification for implementing Sixth Pay Commission recommendations.

The day was being awaited with bated breath by more than five million central government employees. The Union cabinet had approved the recommendations of the sixth pay panel suggestions on 14 August and had made several improvement over the original suggestions made by the central pay panel.

The notification means that the central government employees are all set to receive the revised pay as approved by the government from September 1, giving a much needed relief to central government employees who like others have been hit hard by increasing inflation and spiraling prices.

The implementation of the pay panel recommendations would require huge amount of money that experts say would increase the deficit. The financial implications in 2008-09 on account of the implementation of the recommendations of the Sixth Central Pay Commission as modified by the Cabinet will be around Rs.15700 crore on the Central Budget and Rs.6400 crore on the Railway Budget

It is being said that modification of the Pay Commission award will cost the exchequer an additional Rs 5,000 crore towards annual wages and Rs 6,000 crore towards arrears, said Expenditure Secretary Sushma Nath.

The notification issued by the government today says, “With regard to fixation of pay in the revised pay bands, the basic pay drawn as on 1.1.2006 on the existing fifth CPC pay scales will be multiplied by a factor of 1.86 and then rounded off to next multiple of 10. this will be the pay in the revised running pay band. Grade pay as approved by the corresponding to the pre-revised pay scale will then be added to the pay in the revised pay band. The total of pay in the pay band and grade pay will be the revised basic pay as on 1.1.2006.
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