Federal govt raises minimum wage to Rs37,000

The federal government has announced a 15.6% increase in the minimum wage for its employees, raising it from Rs32,000 to Rs37,000 per month, effective from July 1, 2024. 

According to a notification from the Ministry of Finance, this increase will apply to civil employees of the federal government, civilians paid from defense estimates, contingent staff, and contract employees in Basic Pay Scales on standard terms.

The notification specified that employees with a gross salary of less than Rs37,000 will receive a special allowance to make up the difference. This allowance will be subject to income tax and paid during periods of leave, except for extraordinary leave. 

However, it will not be considered part of the emoluments for calculating pension or gratuity, nor will it be eligible for house rent recovery.

In a separate decision, the government has barred pension payments in foreign exchange for pensioners who were appointed on or after January 2, 1959 and are residing abroad. 

The Ministry of Finance clarified that due to the current account balance situation, the government could no longer allow these pensioners to draw their pensions in foreign currency. This policy change is also supported by the increased accessibility of digital banking channels, making such permissions unnecessary.