New Delhi, Jan. 1: The Prime Minister’s Office has accepted a long-pending demand from the armed forces for a separate pay panel to determine their salaries and perks.

The acceptance came after months of discontent among sections of the forces over remuneration.

A pay panel specific to the armed forces will be set up when salaries of government employees are next revised five years from now, the PMO has said in a note to the cabinet secretariat.

The note also suggests placing lieutenant colonels holding combat or ready-to-combat jobs in their parent service in a pay band higher than what was recommended by the Sixth Pay Commission.

Lieutenant Colonels on deputation will receive salaries according to the higher pay band once they return to their parent service.

It proposes setting up a special committee to resolve concerns over command and control in operations involving more than one arm of the armed forces and on the status of the military as compared to the paramilitary forces.

A senior official in the cabinet secretariat confirmed that the note from the PMO is likely to be discussed by the Cabinet tomorrow.

The decisions come at a time of heightened tensions between India and Pakistan following the November 26 terrorist attacks in Mumbai, when the government can ill afford a disgruntled military.

The pay for the armed forces is at present determined by the central pay commission that fixes salaries for all central government employees except those in autonomous institutions like universities.

Sections of the armed forces have over the past few months raised opposition to the pay prescribed for them by the Sixth Pay Commission, implemented in September 2008.

The chiefs of the army, navy and the air force have also communicated to the government the unhappiness within the services over the Pay Commission recommendations.

Defence minister A.K. Antony is believed to have in turn communicated the concerns to the then finance minister P. Chidambaram.

A committee of secretaries was set up to look into the grievances of the armed forces. It is unclear whether this committee recommended a separate pay panel for the armed forces.

The Sixth Pay Commission recommended that lieutenant colonels be placed in the fifth pay band — a pay band determines the range within which an officer’s basic salary will lie. The exact basic salary is determined by the pay band in conjunction with the person’s particular rank and experience that determine pay scale and increments.

The PMO note has suggested an upgrade for lieutenant colonels to the fourth pay band — with a range from Rs 37,400 to Rs 67,000 a month.