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The implementation of the seventh central pay panel report is set to give the Indian economy a Rs 1 lakh crore boost. However, one look at the breakdown of the numbers show that almost half this money is likely to be spent across just five states—Delhi, Uttar Pradesh, Maharashtra, West Bengal and Andhra Pradesh.
A report released on Monday by the Tata Strategic Management Group, a management consulting arm of the Tata Group, said that central government employees and pensioners living across the four metro cities—Delhi, Mumbai, Kolkata and Chennai—will walk away with almost a fourth of the bounty this year, about 40% of which is set to be disbursed in August and September this year.
Having said that, at least four Tier-II cities—Dehradun, Nagpur, Allahabad and Jabalpur—will see more people getting pay hikes as compared to Bengaluru, which was a retirees’ heaven before the IT boom took the city over, beginning in the 1990s.
In June, the Union Cabinet had approved a 23.5% hike in salaries and pensions, which will likely benefit around 47 lakh central government employees and 53 lakh pensioners.
A further perusal of the data show that apart from the metros, Solapur in Maharashtra and Lucknow in Uttar Pradesh are likely to see the highest number of individuals getting richer by Rs 2-3 lakh during the current financial year.
A bulk of the money is likely to be spent on consumer durables, two and three wheelers and consumer electronics, the report says. More than 30 lakh households are likely to purchase air conditioners, laptops, LED televisions, washing machines, microwaves, smartphones and jewellery. An equal number of households are likely to invest in various kinds of financial instruments, while a third of that number could holiday abroad this year.
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