Earlier reports said that Government could implement Seventh Pay Commission from August 1. It was said that Central government Employees would get increment in their July salary and six months arrears in the month of October.
The linger may result in wake of increased volatility in the markets as a result of Britain's exit from the European Union. For the markets to re-stabilize, it may take another 2-3 months. The same period also awaits the next bi-monthly RBI Monetary Policy (of the outgoing RBI Governor) which may most likely see interest rates remain intact. Even a slight hike holds adequate possibility.
This talked about tenure is critical as amid the already happening exodus from domestic equity markets, load of huge 7th Pay Commission payout on the government exchequer can further jeopardize its fiscal health.
As per Zee News, "In order to stabilize overall outflows from the domestic equity markets, government needs to adopt wait-and-watch policy for another quarter before thinking of implementing the payout as any haste can further increase volatility in the market".
On Friday, Britain voted to quit the European Union after 43 years of membership, throwing the world markets in a tailspin and leaving European leaders worried over how to stem a rising Eurosceptic tide.
The vote rattled Indian financial markets too, shaving over 1,000 points, or 4 per cent, off a key equities index, while pulling the rupee just below the 68 mark to the dollar.
Both Finance Minister Arun Jaitley and Reserve Bank of India Governor Raghuram Rajan sought to calm the markets and said there was no cause for panic as India's economic fundamentals remained strong and along with other macro indicators.
"We are well prepared to deal with the short and medium term Brexit consequence -- strongly committed to our macro-economic framework with focus on stability," Jaitley tweeted from Beijing.