Speaking to senior Finance Ministry sources were keen to the demands being met, insisting the work of the ‘Committee on Allowances’ to submit its final report within May, will determine what is doable.
"The government has a lot of pressures on the purses this year and higher allowances obviously is a key one. Demands are reasonable and realistic. But the government will not be held hostage," said one senior source last night.
They told "The issue of higher allowances is currently under consideration by the 'Committee on Allowances'.
In line with their mandate, the committee will produce a report within May.
This report will form the basis of negotiations with the central government employees unions. Any higher allowance settlement emitting from these negotiations must be affordable and sustainable.
The National Joint Council of Action (NJCA), which is a centralised union of several central government employees unions, has told cabinet secretary that the higher allowances must be given with retrospective effect from January 1, 2016.
The committee will have regard to the national finances before accepts NJCA above demand, the source said.
The central government employees unions had threatened to call for nationwide strike in May due to delay in implementation of higher allowances.
In response to this, the sources said, "the government expects the 'Committee on Allowances' to report by May or even before then. They are going to be very difficult discussions and negotiations."
The 'Committee on Allowances', headed by Finance Secretary Ashok Lavasa was formed in July last year for examination of the recommendations of 7th Pay Commission on allowances other than dearness allowance as the pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances.
The committee was initially given four months time to submit the report to Finance Minister Arun Jaitley.
Later, the Finance Minister Arun Jaitley extended the deadline for report submission to February 22, 2017 but committee has not yet submitted its report.
The central government employees got theirs arrears of basic pay arising from implementation of the 7th Pay Commission recommendations in one go in August salaries. The hike in basic pay has been made effective from January 1, 2016 but they are still awaiting for the higher allowances.
The employees now get all allowances except dearness allowance, according to the 6th Pay Commission recommendations until issuing of higher allowances notification.