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7th Pay Commission to boost consumer durable demand: Nomura

Sources say that the Seventh Pay Commission report will suggest a 15 percent hike in salaries, much lower than the expected 35 percent jump.

The Seventh Pay Commission report is likely to submitted to the Finance Ministry on Thursday, says the sources. However, the government employees and pensioners are in for disappointment as the report is expected to propose a 15 percent hike in salaries starting January 1, 2016.

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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