Highlights of Recommendations of 7th Pay Commission
7th Pay Commission report submitted to Govt
A Akhter MN /
The 7th Pay Commission chairman Justice AK Mathur today submitted his 900 page report to Finance Minister Arun Jaitley, recommending hefty increase in salary, allowance of central government employees as well as pensioners.
The Commission was set up in February 2014 to revise remuneration of about 48 lakh central government employees and 55 lakh pensioners. Its ecommendations will also have a bearing on the salaries of the state government staff. The Union Cabinet had extended the term of the panel in August by four months, till December.
Highlights of Recommendations of 7th Pay Commission
Highlights of Recommendations of Seventh Central Pay Commission
1. Recommended Date of implementation: 01.01.2016
2. Minimum Pay: Based on the Aykroyd formula, the minimum pay in government is recommended to be set at ₹18,000 per month.
3. Maximum Pay: ₹2,25,000 per month for Apex Scale and ₹2,50,000 per month for Cabinet Secretary and others presently at the same pay level.
4. Financial Implications:
a) The total financial impact in the FY 2016-17 is likely to be ₹1,02,100 crore, over the expenditure as per the ‘Business As Usual’ scenario. Of this, the increase in pay would be ₹39,100 crore, increase in allowances would be ₹ 29,300 crore and increase in pension would be ₹33,700 crore.
b) Out of the total financial impact of ₹1,02,100 crore, ₹73,650 crore will be borne by the General Budget and ₹28,450 crore by the Railway Budget.
c) In percentage terms the overall increase in pay & allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 percent. Within this, the increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent.
d) The total impact of the Commission’s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in case of VI CPC.
5. New Pay Structure: Considering the issues raised regarding the Grade Pay structure and with a view to bring in greater transparency, the present system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed. Grade Pay has been subsumed in the pay matrix. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix.
6. Fitment: A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.
7. Annual Increment: The rate of annual increment is being retained at 3 percent.
8. Modified Assured Career Progression (MACP):
a. Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”.
b. The Commission has also proposed that annual increments not be granted in the case of those employees who are not able to meet the benchmark either for MACP or for a regular promotion in the first 20 years of their service.
c. No other changes in MACP recommended.