Government to release Rs17,500 crore pay arrears ahead of festive season

The finance ministry decided yesterday to release the second and last instalment of salary arrears amounting to Rs17,500 crore that will bring cheer to about 50 lakh government employees ahead of festive season.

The arrears are part of the Sixth Central Pay Commission report that was implemented with retrospective effect from 1 January 2006 and the Centre had paid the first installment of 40 per cent (Rs11,000 crore) last fiscal.

The news also bought relief to pensioners, who will also get their final instalment of arrears. There are about 3.8 million central government pensioners- excluding the armed forces according to the All India Central Government Pensioners Association.

Although the finance ministry has not given a timeline to disburse the funds, sources say that it would be paid before Diwali.

Employees who joined after 1 April 2004, will receive the second instalment of arrears after individual application forms for registration to the new pension scheme have been obtained from the concerned government servant.

The total cost of paying arrears will cost the exchequer an estimated Rs29,373 crore.