7th Central Pay Commission:Highlights of Recommendations

Date: November 20, 2015

Salary central government

 7th Central Pay Commission (CPC) headed by Justice AK Mathur has submitted its report to Union government.

Key features are-

Recommended Date of implementation: 01.01.2016

Minimum Pay: Based on the Aykroyd formula, the minimum pay in government is recommended to be set at ₹18,000 per month.

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.

Financial Implications:

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.

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.

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.

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.

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.

Fitment: A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.

Annual Increment: The rate of annual increment is being retained at 3 percent.

Modified Assured Career Progression (MACP):

Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”.

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.

No other changes in MACP recommended.

About Pay commission:-

Pay Commission is set up intermittently by government of India, and gives its recommendations regarding changes in salary structure of its employees. Since India's Independence, seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India.