Wednesday, June 29, 2016

Highlights of the 7th CPC report as approved by cabinet

No betterment in multiplication factor of 2.57
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits.   It will come into effect from 01.01.2016.


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.

5.            Rate of increment has been retained at 3 %. This will benefit the employees in future on account of higher basic pay as the annual increments that they earn in future will be 2.57 times than at present.

6.            The Cabinet approved further improvements in the Defence Pay Matrix by enhancing Index of Rationalisation for Level 13A (Brigadier) and providing for additional stages in Level 12A (Lieutenant Colonel), 13 (Colonel) and 13A (Brigadier) in order to bring parity with Combined Armed Police Forces (CAPF) counterparts at the maximum of the respective Levels.

7.            Some other decisions impacting the employees including Defence & Combined Armed Police Forces (CAPF) personnel include :

·               Gratuity ceiling enhanced from Rs.  10 to 20 lakh. The ceiling on gratuity will increase by 25 % whenever DA rises by 50 %.
·               A common regime for payment of Ex-gratia lump sum compensation for civil and defence forces personnel payable to Next of Kin with the existing rates enhanced from Rs. 10-20 lakh to 25-45 lakh for different categories.
·               Rates of Military Service Pay revised from Rs.  1000, 2000, 4200 & 6000 to 3600, 5200, 10800 & 15500 respectively for various categories of Defence Forces personnel.
·               Terminal gratuity equivalent of 10.5 months of reckonable emoluments for Short Service Commissioned Officers who will be allowed to exit Armed Forces any time between 7 and 10 years of service.
·               Hospital Leave, Special Disability Leave and Sick Leave subsumed into a composite new Leave named ‘Work Related Illness and Injury Leave’ (WRIIL). Full pay and allowances will be granted to all employees during the entire period of hospitalization on account of WRIIL.

8.            The Cabinet also approved the recommendation of the Commission to enhance the ceiling of House Building Advance from Rs.  7.50 lakh to 25 lakh. In order to ensure that no hardship is caused to employees, four interest free advances namely Advances for Medical Treatment, TA on tour/transfer, TA for family of deceased employees and LTC have been retained. All other interest free advances have been abolished.

9.            The Cabinet also decided not to accept the steep hike in monthly contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) recommended by the Commission. The existing rates of monthly contribution will continue. This will increase the take home salary of employees at lower levels by Rs. 1470. However, considering the need for social security of employees, the Cabinet has asked Ministry of Finance to work out a customized group insurance scheme for Central Government Employees with low premium and high risk cover.

10.        The general recommendations of the Commission on pension and related benefits have been approved by the Cabinet. Both the options recommended by the Commission as regards pension revision have been accepted subject to feasibility of their implementation. Revision of pension using the second option based on fitment factor of 2.57 shall be implemented immediately. A Committee is being constituted to address the implementation issues anticipated in the first formulation. The first formulation may be made applicable if its implementation is found feasible after examination by proposed Committee which is to submit its Report within 4 months.

11.        The Commission examined a total of 196 existing Allowances and, by way of rationalization, recommended abolition of 51 Allowances and subsuming of 37 Allowances. Given the significant changes in the existing provisions for Allowances which may have wide ranging implications, the Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on Allowances.  The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates.

12.        The Cabinet also decided to constitute two separate Committees (i) to suggest measures for streamlining the implementation of National Pension System (NPS) and (ii) to look into anomalies likely to arise out of implementation of the Commission’s Report.

13.        Apart from the pay, pension and other recommendations approved by the Cabinet, it was decided that the concerned Ministries may examine the issues that are administrative in nature, individual post/ cadre specific and issues in which the Commission has not been able to arrive at a consensus.

14.        As estimated by the 7th CPC, the additional financial impact on account of implementation of all its recommendations in 2016-17 will be Rs. 1,02,100 crore. There will be an additional implication of Rs. 12,133 crore on account of payments of arrears of pay and pension for two months of 2015-16.


Anonymous said...

This is the worst pay commission recommendation in Indian history

parmanand indoria said...

It is best govt pay commision

Anonymous said...

Commission appreciates staff side for arriving at a fitment factor in a scientific way.commission appreciates staff side for many other scientific and genuine demands and agrees to consider almost all of the demands positively.At last ,only one demand was agreed and recommended,ie,abolition of grade pay system and it has a very good effect-the benefit on promotion will be less than in grade pay system.hurraaaaaaay!!!!!And now,21000,23000,23500 and 24000--all are gone,like merger of da that trended in 2014 first half.Now,every body go and sleep.Good Night.

Dharma Sree said...


S.Lakshman Rao said...

We find 2.57% option is the best to ensure that loss in the next ten years can be well protected...Of course this is a settled view respecting Pensioners/Family Pensioners.We need to wait for the appropriate orders for payment action.

Rajendra singh said...

Worst pay commission. BJP willve heavy defeat in up election it also gone from centres. Theyve made public foolish showing media minimum basic 23500 but it is 18000. They take six months for it why same is in Mathur report in Nov 15 clearly they made Central employees are foolish n shows its bussins man party

Anonymous said...

What the hell everyone says that annual increment retained at 3% and it will help employees as the amount we will get will be 2.57times than as per previous pay Commission.
Basic 23000 sixth pay incr 3% Rs 690 DA 125% ie Rs 865 Total is 1555
This pay commision basic 76000 3% is 2280 Rs , is it 3 times the previous what kind of economist u are ,f..k it

sree kumar said...

Dear All,

Being an Indian citizen I wish to say that we have done a very blunder mistake on electing one of the most useless NDA Government in 2014, it seems that present NDA Government is totally dead against to see the welfare of Central Government Employees especially to Lower /Middle level salaried class employees such if any type of welfare measures has been asked through demand either by Defence side or from Civil Association then this Government is giving negative replies in each steps on each occasions. I also wishes to say that UPA Government was bad but not that much bad to salaried class employees as felt by salaried class during Seventh Pay Commission since the Government has appointed Committee, sub committee to cheat and eye wash to employees including delaying to give Pay Commission related allowances. All Bureaucrats are totally benefited with Pay Commission at present as they got huge hike in their salaries but others especially Pay Band I and II and III are not that much benefited at all in every steps. Now I also realised that Mr AK Antony then the Defence Minister in UPA II, he has done lot of things to Defence Forces especially hiking the Military Service Pay of JCOs/ORs from Rs. 1000 to Rs. 2000/- per month in 6 th Pay Commission, formed two Secretary Level Committee in 2009 and in 2012 finally he has ordered on implementation of One Rank One Pension as per Koshiyari on 26 Feb 2014 and Draft Government Letter was issued in Apr 2014 but present worse Government has entirely spoiled the actual definition and applied total dilution in each steps on One Rank One Pension also the present Government has done nothing repeat nothing to JCOs/ORs on hiking their Military Service Pay and other allowances related to Hard duties performed by Service Personnel especially on Siachen Allowance since Bureaucrats who are sitting at Guwahati or its similar places are getting more Allowance than a Defence Forces who are deployed at Field area/or any other Hard stations. I consider the main culprit is Flag Officers of Defence Forces are not interested to see the welfare of their own subordinates as they are very keen on their own welfare and crazy/greedy on high status like Governors,Ambassadors etc after retirement

In addition i wish to to state that the 7 Pay Commission has severely cheated the Armed Forces Personnel especially Subedar Major and Below & equivalents in Indian Navy and Air Forces on Military Service Pay such as Officers of 03 Forces has been granted the MSP for Rs. 15500/- , Military Nursing Service (MNS) is for Rs. 10800/- and Junior Commissioned Officers and Below (JCOs/ORs) who are the main combatant and facing all threats, hazards first in every field like war/peace/Terrorist activities are only granted Rs. 5200/- per month which is too crucial and mockery to JCOs and ORs & equivalents of Indian Navy and Indian Air Force hence my request is to take up the issue of Military Service Pay with Ministerial committee which was formed on 01 Jul 2016 to settle the anomalies of 7 CPC

I hope your good Office will do the needful to our JCOs/ORs and equivalent Ranks of Indian Navy and Indian Air Force to boost up the morale and to avoid decline in their efficiency by day by day due to such type of irregularities and huge gap of Military Service between Officers/MNS and JCOs/ORs

In addition Broad Banding of Disability Pension to all based on Honourable Supreme Court Judgement of 10 Dec 2014 since MOD has issued Broad Banding of Disability Pensions to only litigant but similar placed Disabled not entitled since they are non litigant..Therefore, necessary action may please initiated to avoid such type of discrimination between litigants and non litigants of Indian Armed Forces similar placed Disabled Personnel on their Disability Pension

Reply Please

With regards

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