New Delhi, June 25: In what could be the fallout of UK’s decision to pull out of the European Union, Prime Minister Narendra Modi led government may defer much-awaited payout of 7th Pay Commission Commission for another 2-3 months. Center is likely to delay the process of implementing the 7th Pay Commission recommendations following increased volatility in the markets as a result of Brexit. Britain voted to leave the European Union, jolting the the 28-nation bloc as well as prompting Prime Minister David Cameron to announce his resignation. 7th Pay
Commission recommendations are likely to come to effect from August 1.
According to a report of Zee News, increased volatility in the markets as a result of Britain’s exit from the European Union may compel the government to delay the implementation of the recommendations of 7th Pay Commission as the market would take 2-3 months to gt stabilized. However Union Finance Minister assured that the government is prepared to deal with any short term volatility after Brexit
The government would also wait for the next bi-monthly RBI Monetary Policy (of the outgoing RBI Governor) which may most likely see interest rates remain intact. The implementation of 7th Pay Commission recommendations could adversely impact the economy as it would increase burden on state exchequer by Rs 1,00,000 crores. The government would keenly observe the next bi-monthly RBI Monetary Policy as even a slight hike may have major impact on fiscal health.
Following Brexit, Indian financial markets on Friday witnessed a 4 per cent fall in a key equity index and a sharp drop in the rupee’s value to 68 a dollar. It resulted in the erosion of nearly Rs 4 lakh crore from the investors’ wealth held in stocks. Currently, Indian economy is going through a tough and crucial times. Any kind of haste in implementing the 7th Pay Commission would have adverse impact on market.
SOURCE - india. com
