For the armed forces, it has recommended a military allowance of Rs 1,000 to Rs 6,000 per month. Recommending a substantial increase in allowances and other benefits, the Commission also suggested a 40 per cent increase in pension and family pension.

What needs to be seen is how far will the UPA government go in appeasing this large vote bank? If it does then the state governments, who are already burdened with a financial crunch, will have to follow suit as a vote capturing exercise.

Though this is a big burden on the economy and can wreck havoc on the finances of the Centre and the state governments, the finance minister while making the Budget speech said there was enough headroom to meet the additional expenditure.

Justice Srikrishna said after submitting the report: "I have recommended something that is good for the nation. I have suggested an average hike of 40 per cent. One of the important suggestions is the recommendation of a good hike in the pays of defence personnel, whose pay has been brought on par with civilian staff, besides making them eligible for special allowance between Rs 1,000 per month to Rs 6,000 per month. This has been suggested to attract young talent in the armed forces, which has been facing a severe manpower crunch owing to more attractive jobs in the private sector.

In a significant move, the Commission has sought to delink salaries of members or chairperson of the regulators from government salaries. The pay commission has also recommended an increase in the salary of chairpersons of regulators, including the SEBI (stock exchange regulator), TRAI (telecom regulator), IRDA (insurance regulator), to Rs 3 lakh per month. This hike, the commission feels, will attract better professionals for the job.

The report says the proposed salary is considered adequate for attracting experts in the field, who, in the Commission's view, are not looking just at the monetary compensation but also at the prestige involved in the job.

The report suggests that women and disabled employees be given a special treatment and has recommended improved working conditions, while it paves way for awarding performers through a higher 3.5 per cent rate of increment against the normal 2.5 per cent.

The Commission also recommended an increase in benefits for women employees, including maternity leave of 180 days, besides flexi-timings in certain cases.

In a move to increase efficiency of the central government employees, the report proposes the introduction of performance related incentive scheme (PRIS), under which the employees will be eligible for pecuniary remuneration over and above the pay. The PRIS would replace ad-hoc bonus scheme immediately and eventually replace productivity-linked bonus.

The report states that in addition to this, a system be put in place for giving market-driven compensation package to young scientists and posts requiring special expertise and professional skills.

The report proposes that all the recommendations be treated as an organic whole as partial implementation will bring in several anomalies and inconsistencies.

The Commission has recommended that the arrears amounting to Rs 18,060 crore, which will be on the exchequer, be paid in two installments. It clarified that the Budget would have to account for as much as Rs 12,642 crore, while the balance of Rs 5,418 crore would have to be provided for in the railway budget.

The Commission also sought to give major benefits to the pensioner by recommending higher rates on attaining the age of 80, 85, 90, 95 and 100 years. It has also sought pension to be paid at 50 per cent of the higher of the average emoluments or last drawn salary without linking it to 33 years of service.

Government offices will remain closed only on the three national holidays. All other gazetted holidays will be abolished and compensated by increasing the number of restricted holidays from two to eight days in a year.