Sources say that the Seventh Pay Commission report will suggest a 15 percent hike in salaries, much lower than the expected 35 percent jump.
Sonal Verma of Nomura says the indicated 15 percent hike would be much lower than the expected 35 percent that was given in 2008. She adds that the government, on its part, would try to balance the expenses with it trying to retain its fiscal deficit target of 3.5 percent of GDP for this year.
Verma believes the seventh pay commission will boost demand and sale in consumer durables such as cars, two-wheelers and electronics.
Pay commissions review the salary structure of central government employees every ten years.
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