All About The 7th Pay Commission

The 7th pay commission recommends changes on the structure for military and civil servants under the Government of India. In a report submitted to the then FM, a hike of 23.55% in the allowances and payment of government employees was suggested.

The 7th Pay Commission is a setup by the Indian Government that recommends changes in the salary structures and income tax slab for central government employees. Initially planned to be implemented back in Jan 2016, it got delayed.

With the 7th Pay Commission news, government employees will receive increases in their salaries, allowances and other benefits as well. The Pay Commission was set up to discuss and recommend these changes in the salary structure. There have been seven pay commissions setup since India received independence that recommends changes on the structure for military and civil servants under the Government of India.

The report was submitted by AK Mathur to the then Finance Minister, Arun Jaitley. It suggested a hike of 23.55% in the allowances and payment of government employees.

A few highlights of the 7th Pay Commission –

Here are few of the highlights of the 7th Pay Commission –

The minimum wage for a newly recruited government employee, increased anywhere from Rs. 7000 to Rs. 18,000 a month. A freshly hired Class I officer receives an increased minimum salary of Rs. 56,100 per month.

The Commission recommended an increase in the maximum compensation to Rs. 2.25 Lakhs per month for the Apex Scale as well as a salary of Rs. 2.5 lakhs per month for the Cabinet Secretary as well as the others were working at the same level.

3. Pay Matrix

As issues are existing in the Grade Pay Structure, the 7th Central Pay Commission recommended a new pay matrix as well. Once it is implemented, a government employee’s status is not decided by the Grade Pay but by this Pay Matrix.

4. The new structure

Since the Central Government employees heard all about the Pay Matrix system, there are a lot of questions around levels and grades. The New Pay Structure also recommended that the 7th Pay Commission include all existing levels without the introduction of new levels.

The Commission recommends the full pay as well as allowances for all employees hospitalized due to WRIIL. It also recommends a uniform Fitment Factor that partially eliminates any discrimination in the system. It has also recommended a Fitment Factor of 2.57.

Pertaining to the 7th Central Pay Commission, the fitment factor is set to be around three times from the earlier 2.57x. As per the recommendations made by the 7th CPC, employees demand a hike of 3.68, which then increased the factor by 3.

6. Dearness Allowance

The Dearness Allowance also witnessed a hike of 2%, and this came as a relief for government employees. This act by the Union Cabinet benefits more than 50 Lakh Central Government employees as well as 55 lakh staffers and pensioners. This was focused on the employees of the Central Government as they are more likely to face factors such as inflation and more.

7. Increment

The Commission also suggested the 3% p.a. increment be retained

8. Modified Assured Career Progression (MACP)

The 7th Pay Commission improves the service quality offered by the Indian Government and focuses more on individual performance as well. The performance benchmarks for MACP have been made stricter by adding a “Very good” for performance levels which were initially “Good.”

9. Military Service Pay

The 7th Pay also recommends MSP be paid for Defence Personnel alone. MSP is payable for all the ranks, including Brigadiers and people at the same level as well.

10. Allowances

The Cabinet examined 196 allowances and abolished 51 and retained 37.

11. House Rent Allowance

The 7th Pay Commission looks to increase basic pay for government employees and also recommended that the HRA increase by 24%. It also states that the HRA increases from 27%, 18% and 9% when the DA crosses 50%. The HRS increases will be paid at 30%, 20% and 10% once the DA goes past 100%.

12. Advances

The House Building Advance and Personal Computer Advance were also abolished along with any non-interest bearing advances.

Thus, this is a good list of everything you need to know regarding the 7th Pay Commission.

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Shalini L
Shalini L

One of the prime contributors for this blog, Expertise in Staffing and Recruitment, Content Strategist by Profession. A Music Lover & Traveller by Choice.

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