With five key states going for elections later this year and the 2014 general elections approaching, the government has announced setting up of the seventh pay commission which comes as good news for central government employees.

“Prime Minister Manmohan Singh approved the constitution of the 7th pay commission. Its recommendations are likely to be implemented with effect from January 1, 2016,” said finance minister P Chidambaram in a statement.

The announcement comes as the battered government is eyeing a major chunk of voters who are central government employees. The seventh pay commission will benefit 50 lakh central government employees. It will also benefit 30 lakh retired central government employees including defence personnel and railway employees.

The finance minister’s statement said, “The average time taken by a pay commission to submit its recommendations has been about two years.  Accordingly, allowing about two years for the 7th CPC to submit its report, the recommendations are likely to be implemented with effect from 1.1.2016.”

The last pay commission recommendations were implemented from January 1, 2006.

The Congress party, the main constituent of the UPA government, welcomed the government’s decision. “7th Pay Commission of Govt employees announced.

Except for 6th Pay Commission all Pay commissions are set up in 3rd year of a decade....The government should attract best of talents as its employees. Pay Commissions help in attracting and also retaining best available talents,” Ajay Maken, party general secretary in-charge of communication commented on the micro-blogging site Twitter.

Maken also took a dig at BJP. “NDA rejected the legitimate formation of 6th Pay Commission in 2003. Congress set up 6th pay commission in 2005, now again the 7th CPC in 2013.”

The government is yet to announce the names of the chairperson and members of the 7th pay commission. “It will be finalised and announced shortly after consultation with major stakeholders,” Chidambaram said.