7th Pay Commission FAQ

 

7th pay commission

The new central pay commission i.e. the 7th pay commission has been cleared in the cabinet. The cabinet has approved almost all the proposals given under the 7th pay commission for the central govt. current employees and retired employees. As per the reports of the 7th pay commission, it will get implemented from 1st Jan, 2016. There are several remodelling of the old pay structures of the govt. employees in this pay commission. Also the allowances structure will also be revised as many allowances will be permanently discontinued. The has been a huge leap in the maximum salary and minimum salary of the central govt. employees.

7th pay commission FAQ

7th Pay Commission launch date

On 29th June, 2016, the centre has agreed to the recommendations of the pay commission committee which proposed their proposals back in the latter half of 2015. The set date of implementation of the 7th pay commission is 1st January, 2016. This means the beneficiaries of the central pay commission will get the benefits calculated from the implementation date i.e. 1st Jan, 2016. The implementation period of the 7th pay commission is however very less compared to the past pay commissions. The last pay commission was implemented after a long wait of 32 months. Whereas the employees have a thing to rejoice as the new pay commission will be implemented just after 6 months of the actual implementation date.

Beneficiary

The direct beneficiaries of the new 7th central pay commission are the central govt. employees posted in various departments. In addition to the in – service employees of the central government, all the retired employees of the central govt. will be directly benefited with the new pay commission, as they receive their pensions as per the ongoing pay commission. The number of beneficiaries is more than one crore. An estimated number of 47 lakh central govt. employees are at present in – service. Apart from this, approximately 53 lakh retired central govt. employees will be benefited with the 7th pay commission. These figures also include the defence employees.

Sl. No. Beneficiary Attributes Approximate strength
1 Total no. of in – service beneficiaries 47 lakh
2 Total no. of retired pensioners beneficiaries 53 lakh
3 Total no. of in – service defence personnel 14 lakh
4 Total no. of retired defence personnel 18 lakh

 Benefits under 7th Pay

This 7th pay commission will bring with itself new pay matrices for the central govt. employees all the old pay bands will be reconstructed along with the assigned grade pays. The employees and pensioners will experience a pay hike of around 2.57 times, which is going to be the fitment factor for this central pay commission. The minimum and maximum pay of a central govt. employee will get far more than double, which is a big benefit of this pay commission. Several allowances will be remodelled while some will be merged to form new allowances.

Sl. No. 7th CPC attributes Information
1 Date of Implementation 1st Jan, 2016
2 Date of union cabinet approval 29th June, 2016
3 Additional financial burden Rs. 1.02 lakh crore
4 Fitment factor 2.57
5 Annual Rate of increment 3 % of basic
6 Maximum pay Rs. 2.5 lakh
7 Minimum Pay Rs. 18,000
8 Gratuity ceiling Rs. 20 lakh
9 HBA ceiling Rs. 25 lakh

 Introduced Pay Matrix in 7th Pay CPC

A completely new and renovated pay matrix has been prepared and will be implemented under the 7th central pay commission. This new pay matrix will have separate rows of pay bands and grade pays where the central govt. employees will be fitted. The principle factor and the rationale factors of the pay matrices will also be adjusted accordingly.

Minimum Pay

A major aspect of the new pay commission i.e. the 7th central pay commission is the minimum pay. This is the starting pay of the lowest most employees of the central govt. The recommendations of setting the minimum pay to Rs. 18,000 per month were approved by the cabinet, which is a major thing to rejoice. Thus, a central govt. employee will not get monthly salary less than Rs. 18,000 per month. The minimum pay according to the 6th pay commission, which is going to be replaced was RS. 7,000 per month.

Maximum Pay

Under the 7th pay commission, the maximum salary which a central govt. employee would get will also hike by a big margin. Under the existing 6th pay commission, the maximum salary was Rs. 90,000 per month. This salary was drawn by the top officers of the ranks equivalent to the cabinet secretariats. This maximum pay will rise from Rs. 90,000 to RS. 2.5 lakh per month, which is a major benefit to the top officials.

Pension After 7th Pay Commission

There are around 53 lakh employees of the central govt. who have retired from their service. They receive their monthly pension and other retirement benefits according to the pay commission followed by the centre. After the implementation of the 7th central pay commission, their pension structures will get modified. They will also experience the similar fitment factor of 2.57 to their basic salary. Also the existing National Pension System (NPS) will also be reformatted and streamlined.

Fitment factor Ratio for all matrices 

The fitment factor is the number which will be uniformly multiplied to the basics of each row of the pay matrix. The existing basic pays of the central govt. employees which is the addition of the pay scale and the grade pay will be multiplied by the new fitment factor for the 7th central pay commission. The cabinet has passed the recommendation of the proposed fitment factor, which is 2.57. This means the basic salary of all the central govt. employees and pensioners will be multiplied with the fitment factor of 2.57.

Rate of increment In 7th Pay Commission

All in – service employees and pensioners get an annual salary increment. The 7th central pay commission has kept the old annual rate of increment to 3 per cent. This is one of the unchanged factors under the pay commission. This rate of increment is applicable on the basic salary of the central govt. employees. However, after the fitment factor of 2.57 is applied, the annual increment will also get hiked.

Defence Pay Matrix 

Some modifications in the defence pay matrix will be performed under the 7th pay commission. The rationalisation index for the ranks of Brigadier, Lieutenant Colonel and Colonel will be enhanced. Also there will be parity among the central police forces.

Rates of Military Service Pay

For the defence forces, benefits of the 7th pay commission are that, they will receive a higher military service pay along with the normal pay hike. There are around 14 lakh in – service defence force employees along with 18 lakh retired defence personnel who will get benefitted. The lowest MSP at present is Rs. 1,000 for the low ranks where as the highest rank defence officers get MSP of Rs. 15,500

Gratuity ceiling

The death gratuity ceiling has also been raised from Rs. 10 lakh to Rs. 20 lakh.  In addition to this, there will be an enhancement of 25 per cent death gratuity when the Dearness Allowance rate gets increased by 50 per cent.

Leave Facility: Hospital Leave, Special Disability Leave and Sick Leave

At present, there are three existing medical leave facilities available namely Sick Leave, Hospital Leave and Special Disability Leave. These three leaves will be merged to have a new medical leave named Work Related Illness and Injury Leave. This leave will enable full salary and allowance benefit to the central govt. employees

House Building Advance After 7th Pay Commission

At present, the house building advance, commonly known as HBA is sanctioned up to Rs. 7.5 lakh per employee. But the 7th pay commission has raised this HBA ceiling to Rs. 25 lakh. This is a major benefit to the employees who need funds for housing.

Advances for Medical Treatment

A total of four advances have been kept interest free for the central govt. employees under the 7th pay commission. One of these advances is the Medical Treatment Advance which is totally interest free. In addition to this, the other three are the LTC, travelling allowance of employee and the travelling allowance for families of the employees who are deceased

TA for family of deceased employees

The families of the deceased central govt. employees get travelling allowance as per the recommendations of the central pay commission. The advance is an interest free one. This TA is applicable only for rail and bus trips.

LTC have been retained

As per the 7th pay commission, the LTC amount which the central govt. employees get will be unchanged. They will receive the old LTC advance they were getting in the 6th pay commission.

Interest free advances have been abolished

All the advances which were interest free are abolished under the new 7th pay commission. At present only the above mentioned four advances will be kept interest free, i.e. LTC, TA of employee, HBA and TA for deceased employees’ family dependable members.

Central Government Employees Group Insurance Scheme (CGEGIS)

However, in the sector of the group insurance policy, the recommendations of the 7th pay commission were not kept by the cabinet. However, appeal has been made to rationalize and modify it with by lowering the insurance premium rates and maximizing the benefits

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One of the most prominent news in the present market is 7th pay commission has been submitted and there are immense curiosities of people regarding the overall details about what the new pay scale and grade pay shall be. A complete new matrix system has been introduced by the commission and it comprises of 18 horizontal levels for taking care of fixation of pay on MCAP.

 

It is a fact that, on one hand it is going to provide a huge stimulus in the economy of coming years. Like the real estate and auto sectors shall definitely have huge beneficiaries. But on the other hand, this scenario shall be inflammatory in nature and thus it is going to create a balance within inflation and growth. However, in this article we are going to share all the details regarding all grade pay and pay scales.

The details of new pay structure

Firstly the recommended date of implementation was 1st January 2016. Now, let us delve deep into the financial implications. In the new pay structure, the issues that have been raised due to the grade Pay Certificate, to bring much more transparency, the current format of grade pay and pay bands have been dispensed by a complete new pay matrix. The pay matrix shall be the primary factor in determining the status of any central government employee. This system is definitely much better than the previous formats where grade pay was the major tool for determining the status of employees. A 23.55% hike within the salaries has been recommended by the 7th pay commission which shall be effective from the current year with the minimum salary range of a central government employee will be Rs 18000.

The different features of grade pay and pay scale in 7th pay commission

Fitment: A uniform fitment factor of 2.57 shall be applied for all the employees. This was a necessary change since it is going to bring uniformity within the central government employees. It has been mentioned by the commission that previously fitment factor was determined according to grade pay, which create an inequality within the employees. Also, the inconsistency within computation of grade pay or the spacing of pay bands has a direct bearing within fitment benefit.

Annual Increment: One of the most important changes that has been brought in this 7th pay commission is, employees shall be provided with a certain target for a year to determine the level of performances. The increment rate shall remain the same as previous of 3%. But the implementation of target is definitely going to change the perception of central government employees. Because if the employees are not able to reach the target, annual increment shall not take place. This breaks up the widespread perception that increments are going to take place within hierarchy as a matter of course. Thus, grant for MCAP shall be solely based depending on the threshold of performance.

Military service pay (MSP): This is another important aspect of the 7th pay commission all grade pay and pay scale. The MSP can be said to be a form of compensation that shall be provided to military personnel and defense forces. Previously, the MSP was according to the ranks and it was payable for all ranks that includes Brigadiers. And in the revised MSP, Non combatants shall have a grade pay of 3600, JCO/ORS shall have 5200 as grade pay, Nursing officers shall have 10800 and Service officers will have 15500 as grade pay.

Lateral Entry: A complete new form of lateral entry settlement has been formed within the defense forces that are in sync with the specific requirements of an organization in which such personnel shall be absorbed. A new package has been introduced for the CAPFs lateral entry.

Short Service Commissioned officers: The SSC officers shall now have the allowance in exiting Armed forces within any point of time between 7-10 years. The officers shall also have a benefit of terminal gratuity that is identical to 10.5 months of reckonable emoluments. A new program which is fully funded for one year has been introduced for the M. Tech programme or Executive programmer at premier Institutions.

Allowances: The allowances have changed to a whole new extent. The newly formatted nine-cell matrix will be the structure of allowance for central government employees. One additional cell within this matrix stays at the top which is known as the Siachen Allowance. The risk and hardships matrix has been created for governing allowances regarding risks and hardships. The Siachen Allowance has been stated as the top allowance for risk and hardships and it is important to note that there is no other R-H allowance which is higher than the Siachen Allowance.

House Rent Allowance: According to the new commission, the basic pay has been uplifted, and this is the reason House rent shall be provided at 8%, 16% and 24% of new basic pay depending on Class Z, Y, X cities. And another cause of relief for the government employees is with an increment in DA to 50%, there shall be a revised rate of HRA, which will be 9%, 18% and 27%. It will be further revised when the DA reaches 100%.

But one of the major problems that prevailed with previous pay commission’s grade pay and pay scale is the CAPFs, PBOs for defense and Indian Coast guards are completely deprived of allowances. This is done on the grounds that the compensation for housing shall be allowed for authorized married establishments only. But in this HRA coverage, it has been expanded to be attained by all.

Advances: The advances that were non-interest bearing have been abolished. And apart from interest bearing advancements, the house building and personal computer advances are retained. The house building advancement in this present pay commission has enhanced to 25 Lakh from the present allowance to 7.5 Lakh.

Medical Facilities: There has been the recommendation of a complete new health and Insurance scheme and the pensioners shall not be exempt from it.  Also, for the benefit of pensioners that have been residing outside the CGHS area, cashless medicinal facilities shall be offered. The CGHS shall be empanelled within CS for such facility being offered to the pensioners. The postal pensioners shall also be merged along with CGHS.

Gratuity: There has been the increment within the ceiling gratuity to20 Lakh that was previously 10 Lakh. Also there have been recommendations for the increment of ceiling gratuity in case the DA gets raised to 50%.

Pension: the pension scheme for civil employees has been revised that includes CAPF personnel as well. This is definitely going to bring parity within present retirees and past pensioners for the equal length of service within pay scale during retirement. The past pensioners will be fixed within the pay matrix that has been recommended by pay commission. But the amount shall increase for notional pay of retirees by addition of total increments that has been earned at 3%. For the military and defense personnel this will also include the MSP as admissible.

A brief tabular overview of 7th pay commission

SL NO Factors of 7th pay commission A brief detail
1. Fitment factor An essential change that has been brought in this 7th pay commission. A uniform 2.57 fitment factor shall be provided to all the central government employees.
2. Annual Increment The increment rate is 3%, but additional factor is, this increment shall be implemented according to performance. This means no increment, if target is failed.
3. MSP Previously MSP was paid according to the ranks of military personnel, but in the revised plan, the grade pay of Military service has increased to a great extent.
4. Lateral entry This offers a new form of settlement within defense forces that meets specific requirements.
5. SSC officers Allowing to leave the armed forces within a term of 7-10 years. Also a terminal gratuity of 10.5 months of reckonable emoluments shall be allowed.
6. Allowances 52 allowances have been abolished and there has been the formation of risk and hardship allowance matrix. The Siachen allowance is at the top of allowance matrix.
7.  House rent This has been done in accordance with basic pay. Also CAPFs, coast guards and PBOs are provided with this similar opportunity which was previously not available for these officers.
8. Advances The 7th pay commission shall not allow the benefit of non-interest allowances. But employees can rest assured that the other advances like Personal computer advance and home building advance shall be available. And The house building advances has also increased.
9. Medicinal facilities A new health insurance scheme has been introduced for the pensioner. Even for those who are residing within CGHS area shall be provided with cashless medicinal benefits.
10. Gratuity The ceiling gratuity shall be increased to 20 Lakh and with the increment of DA it has been recommended to increase.
11. Pension Pension schemes have been revised which also includes CAPF personnel.

  One Response to “7th Pay Commission FAQ”

  1. Dear Listener,

    I am a fixed pay salaried Employee of Municipal Corporation. I joine in Oct 2015.. 7th Pay commission lay on 01/01/2016.
    Will affect our Fixed Salary income slab 7000/8000/9000. ???

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