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7th Pay Commission: Cabinet Consents Proposal, Know Grade Wise Changes in Salary Structure

Jun 29, 2016 14:10 IST
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Central government employees who were waiting for the 7th Pay Commission to be declared have all the reasons to celebrate. The Union Cabinet on Wednesday approved 23.55% increase in the salaries, allowances and pension for more than 1 crore government staff and pensioners of central government made by the Commission. The salary hike will be effective from 01 January 2016 onwards.

A 900 page report was presented to Finance Minister Arun Jaitley in November 2015 by Retired Justice AK Mathur who headed the Commission.

The clearance of the Seventh Pay Commission will benefit 4.8 million staffers and 5.5 million pensioners across the nation. The hike will be around 14.27% in basic pay which brings in Rs 18,000 to be minimum pay of a central government employee, which presently is Rs 7000.

Take a look at the table below to know the about the Current Basic Salary and Increased Basic Salary of Central Government Employees after declaration of 7th Pay Commission.

Current Basic Salary

Increased Basic Salary

Rs 7000

Rs 18000

Rs 13500

Rs 40500

Rs 21000

Rs 63000

Rs 46100

Rs 220000

Rs 9000

Rs 250000

According to reports, the recommended percentage of 14.27% increase in basic pay by panel is recorded to be the lowest in 70 years. The  2016-17 financial year has grabbed total of Rs 1.84 lakh crore for centre’s total salary and allowances bill which estimates to Rs 65, 687 crore. The amount is 55% higher than last year when the amount was calculated Rs 1.18 lakh crore.

The pay commission is likely to change the salary structure soon. The system of pay bands and grade pay will be changed by “Pay Matrix” system.

A Layman’s Guide to Pay Commission

Pay Commission has been set up by the Government of India, since Independence. The Commission is involved in giving recommendations regarding the salary structure of the Central government employees working in the civil and military divisions. Till date seven pay commissions have been set up for the same purpose.

The announcement for the 7th pay Commission was made on 04 February 2014. While Justice AK Mathur was the head of the Commission, other notable members included Vivek Rae, Dr. Rathin Roy and Meena Agarwal.

What are the other salient features of the 7th Pay Commission?

  • Annual increment has been hiked to 3%.
  • HRA has been increased to 27%, 18% and 9%, if the DA crosses 50%; and further revision to 30%, 20% and 10%, when DA crosses 100%.
  • Introduction of Health Insurance Scheme replacing the Central Government Health Scheme (CGHS).
  • Introduction of OROP pension scheme for defence personnel
  • Child Care Leave to be granted at 100% of salary for first 365 days and at 80% for next 365 days. CCL to be granted for single male parents.

More Articles on 7th Pay Commission

Here's how the 7th Pay Commission can affect your pay, most likely from August 2016!

7th Pay Commission vs. 6th Pay Commission: Comparative Analysis

7th Pay Commission: Pay hike recommendation likely to be approved this Wednesday

DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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