7th Pay Commission

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The Government of India is planning to implement the 7th Pay Commission’s recommendations by January 2017. Uttar Pradesh has already approved the 7th Pay Commission and has announced that it will be implemented by January 2017.

Highlights of the recommendations of the 7th Pay Commission:

Recommended minimum pay for government employees:� The minimum pay of a newly recruited government employee at entry level is increased from Rs.7,000 to Rs. 18,000 per month. For a newly recruited Class I Officer, the minimum salary is increased to Rs.56,100 per month.

Recommended maximum pay for government employees:� The 7th Pay Commission also recommends to increase the maximum pay for government employees to Rs.2.25 lakhs per month for Apex Scale and Rs.2.5 lakhs per month for Cabinet Secretary and others working at the same level.

Pay Matrix:� Considering the issues that exist in the Grade Pay Structure, the 7th Pay Commission has recommended a new pay matrix. Once the 7th Pay Commission is implemented, the status of a government employee will not be decided by Grade Pay but by the level in the new Pay Matrix.

New Pay Structure:� Ever since Central Government employees heard about the Pay Matrix system, they have questions about their grades and levels. The New Pay Structure recommended by the 7th Pay Commission have included all existing levels and have not introduced any new levels.

Work Related Illness and Injury Leave(WRIIL):� The Pay Commission recommends full pay and allowances to be granted to all employees who are hospitalized due to WRIIL.

Fitment: The 7th Pay Commission recommends a uniform Fitment Factor to eliminate partiality and discrimination in the system. The Pay Commission has recommended a uniform Fitment Factor of 2.57 for all employees.

Annual increment:� The Pay Commission has suggested retaining the annual increment of 3% p.a.

Modified Assured Career Progression(MACP):� The 7th Pay Commission aims at improving the quality of services offered by the Government of India and thereby focuses on individual performance. According to the report, performance benchmarks of MACP has been altered and made stricter. They have made the performance indicator stricter by adding “Very good” performance level which was “Good” before. The report goes on to recommend that no annual increments should be given to employees who do not meet their performance level and no promotions will be given if MACP is low for the first 20 years in service.

Military Service Pay(MSP):� The 7th Pay Commission recommends MSP to be paid for Defence Personnel only. MSP is the compensation paid to people offering military service in India. MSP will be payable for all ranks inclusive of Brigadiers and people at the same level.

Allowances:� The Cabinet has examined a total of 196 allowances which are currently present and have abolished 51 allowances, retaining 37 allowances.

House Rent Allowance:� As the 7th Pay Commission aims at increasing the basic pay of government employees, the Pay Commission has recommended that the House Rent Allowance also increase by 24%. The Commission also states that HRA will increase to 27%, 18%, and 9% when DA (dearness allowance) crosses 50%. HRS will further increase and will be paid at 30%, 20%, and 10% when DA crosses 100%.

Advances:� Apart from Personal Computer Advance and House Building Advance, 7th Pay Commission has abolished all non-interest bearing advances. It is also noteworthy that House Building Advance has been increased from Rs.7.5 lakhs to Rs.25 lakhs.

Central Government Employees Group Insurance Scheme (CGEGIS):� The Pay Commission has made some changes to Central Government Employees Group Insurance Scheme. The recommended rates are as follows:

Medical changes:� The 7th Pay Commission has recommended a Health Insurance Scheme for Central Government employees and pensioners. The report also recommends cashless medical benefit for pensioners outside CGHS area.

Pension:� The Commission suggests a revision in the current pension scheme. They recommend a revised pension formulation for civil employees including CAPF and Defence Personnel who have retired before 01.01.2016. The new formulation will focus on bringing parity between existing pensioners and current retirees. The new pension will be calculated by placing the past pensioners on the new Pay Matrix system. Later, the pension amount will be arrived at by adding the number of increments a pensioner has earned in that level while in active service at the rate of 3% p.a. 50% of the so arrived amount will be the new pension. A pensioner will get a multiple of 2.57 times the current basic pension.

Gratuity:� The Commission recommends the ceiling of� gratuity� to be increased from the current Rs.10 lakh to Rs.20 lakh. They further recommend that the ceiling on gratuity may be raised by 25% when the DA rises by 50%.

Disability Pension for Armed Forces:� Instead of the current percentile based disability pension regime, The Commission has recommended implementing a slab-based system for disability element.

Pay scale for Indian Air Force

According to the recommendations made in the 7th Pay Commission, the pay scale for Indian Air Force employees will be based upon the officer’s rank, an area of posting, branch, and designation. The below table shows the detail pay structure:

They have also revised the allowances paid to Indian Air Force employees. The revised allowance structure is as follows: