7th Pay Commission Highlights

7th Pay Commission Highlights

The Union Cabinet on Wednesday approved the implementation of the recommendations of 7th Pay Commission on pay and pensionary benefits. It will come into effect from January 01, 2016. The 7th Pay Commission recommendations are being implemented within 6 months from the due date.

The Cabinet also decided that arrears of pay and pensionary benefits would be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next financial year.

The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.

Here are 14 developments on the 7th Pay Commission roll-out:

1. The present system of Pay Bands and Grade Pay has been dispensed with and a new Pay Matrix as recommended by the Commission has been approved. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the Pay Matrix. Separate Pay Matrices have been drawn up for Civilians, Defence Personnel and for Military Nursing Service. The principle and rationale behind these matrices are the same.

2. All existing levels have been subsumed in the new structure; no new levels have been introduced nor has any level been dispensed with. Index of Rationalisation has been approved for arriving at minimum pay in each Level of the Pay Matrix depending upon the increasing role, responsibility and accountability at each step in the hierarchy.

3. The minimum pay has been increased from Rs 7000 to 18000 p.m. Starting salary of a newly recruited employee at lowest level will now be Rs 18000 whereas for a freshly recruited Class I officer, it will be Rs 56100. This reflects a compression ratio of 1:3.12 signifying that pay of a Class I officer on direct recruitment will be three times the pay of an entrant at lowest level.

4. For the purpose of revision of pay and pension, a fitment factor of 2.57 will be applied across all Levels in the Pay Matrices. After taking into account the DA at prevailing rate, the salary/pension of all government employees/pensioners will be raised by at least 14.29 % as on 01.01.2016.

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