The government increased the minimum entry level salary of a government employee to Rs 7,000 against Rs 6,660 recommended by the Commission headed by Justice B N Srikrishna who submitted the report in March this year.

Consequently, it would push up the total emoluments of an employee at the lowest level beyond Rs 10,000 per month including allowances.

It also increased the rate of annual increment from 2.5 per cent to 3 per cent.

In the defence sector, it approved at least three assured promotions for all defence forces personnel and civilian employees under the modified Assured Career Progression scheme.

While civilians would get this after 10, 20 and 30 years of service, defence forces jawans would be promoted under ACP after 8, 16 and 24 years.

The hiked salary would be given to the employees beginning September this year and the arrears from January 2006 would be given in cash in two installments -- 40 per cent this fiscal and 60 per cent in 2009-10.

The financial implication of Pay Commission on the General Budget would be Rs 15,717 crore (Rs 157.17 billion) and Rs 6414 crore (Rs 64.14 billion) on the Railway Budget in 2008-09.

The government's present salary bill is over Rs 70,000 crore (Rs 700 billion) and the pension bill is over Rs 30,000 crore (Rs 300 billion).

Finance Minister P Chidambaram said the Budget deficit target would be adhered to, despite the implementation of the Pay Commission recommendations.

The government for the first time approved Military Service Pay for armed forces personnel, under which officers would get Rs 6,000 over and above their pay per month.

The lowest limit of disability pension for defence personnel would be doubled to Rs 3100 a month.

The Pay Commission has recommended a minimum basic pay of Rs.6,600/- The Government has increased it to Rs.7,000/-.

The Multiplication factor for fitment in the revised Pay Scale was 1.74 as recommended by the Commission, Government has increased it to 1.86.

Annual increment to be 3% as against 2.5% recommended by the Pay Commission.

Three Assured Promotions for all Civilian Employees.

Atleast one DGP with Pay of Rs.80,000/- for each State. Other DGPs and members of CBEC, CBDT will reach the Rs.80,000/- Scale in two years.

Big jump for Additional Commissioners in Customs and Central Excise and Income Tax, They are placed in the Pay Band 4 which is 39,200 – 67,000, the third highest Pay Scale in India after the Cabinet Secretary and Secretary to the Government.

The New Scales will be effective from 1.1.2006 and the allowances from 1.9.2008. Arrears will be paid in two instalments – 40% in the current Financial Year and 60% in the next.