Budget 2016: Government to allocate Rs 1.10 lakh crore for 7th Pay Commission, OROP: Arun Jaitley


Budget for the next fiscal needs to provide Rs 1.10 lakh crore for implementing the One Rank One Pension (OROP) Scheme and 7th Pay Commission award, besides a higher allocation for the farm sector, Finance Minister Arun Jaitley said on Friday.

Addressing the Consultative Committee attached to the Finance Ministry, he also said that India has potential to grow at a much faster pace even as he exuded confidence that fiscal deficit target for current financial year will be within target.

“During the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of 7th Pay Commission recommendations and OROP Scheme,” Jaitley said.

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He also said that the agriculture growth in the last two years has suffered mainly due to insufficient monsoons and highest ever amount was given to the states for drought relief during the current financial year, 2015-16.

“More incentives will be given to agriculture sector for increasing agriculture production and productivity,” he said.

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India, he said, continues to be one of the fastest growing economies in the world, but there is still potential to grow at a much faster pace.

“The world economy is passing through an uncertain and fragile situation… The silver lining is low international commodities and oil prices which in turn has helped in better macro-economic situation of the country,” Jaitley said.

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The 7th Pay Commission in November recommended increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17.

The new pay scales, subject to acceptance by government, will come into effect from January 1, 2016.


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The government had last year announced that it will implement OROP under which a uniform pension would be given to armed forces personnel retiring at the same rank with the same length of service. The scheme would be implemented from July 1, 2014.