What are the changes made in the 7th Pay Commission?
The Government of India has appointed the 7th Pay Commission for periodical examination, review, and recommendations of changes to the structure and quantum of salary that is paid to government employees in varied departments, ranging from Central Government employees to defence forces personnel. The changes are not limited to just the salary but also includes bonuses, allowance, benefits in cash or kind, and other facilities. Started after India’s independence, and announced once every 10 years, the 7th of the Pay Commissions was announced in 2013.
Highlights of the 7th Pay Commission
The 7th Pay Commission has approved several of the recommendations that were put to it over the years. These are the key highlights:
- Increase in maximum pay: At the secretariat or equivalent level for the Apex scale, there is an increase in the maximum pay to the amount of Rs.2,25,000 per month while for Cabinet Secretaries and equivalent pay levels, it is now Rs.2,50,000 per month.
- Increase in entry-level minimum pay: Entry-level minimum pay has been increased to Rs.18,000 where it was Rs.7,000 previously. Newly recruited Class I officers will get a minimum salary of Rs.56,100 per month.
- Pay matrix and not grade pay: Till now, the grade pay and pay bands determined the employee’s status. These have been subsumed into a new pay matrix which will determine the employee’s status from now on.
- Annual increment: There has been no increase in the annual increment rate which has been retained at the same percentage of 3%. This will actually be of benefit to individuals who become employees in the future as their basic pay will be higher because their annual increments will be 2.57 times that of the present.
- Military Service Pay (MSP) restrictions: Military Service Pay will be applicable only for personnel from the defence forces. Till now, it was applicable for all ranks that were up to as well as inclusive of Brigadiers or their equivalents.
- Changes in MSP: The MSP rates have been revised to Rs.3,600, Rs.5,200, Rs.10,800, and Rs.15,500 from Rs.1,000, Rs.2,000, Rs.4,200, and Rs.6,000 respectively, for defence forces personnel of various categories.
- Uniform fitment factor: A fitment factor of 2.57 will be applicable across all the levels of the pay matrices. This is for the pension and salary revisions.
- Change in status of allowances: The Commission has recommended abolishing 51allowances with 37 allowances being subsumed into existing allowances or newly proposed ones. House Rent Allowance (HRA) has been recommended to be increased because of increases in basic pay and changes in the DA (Dearness Allowance).
- Gratuity ceiling increased: The ceiling of gratuity has increased to Rs.20 lakh from Rs.10 lakh. When the DA increases by 50%, the gratuity ceiling may be further increased by 25%.
- Terminal gratuity: Short Service Commissioned Officers who can exit the Armed Forces between 7 and 10 years of service will get terminal gratuity that is equivalent to 10.5 months of reckonable emoluments.
- Pension update: Personnel of the defence forces, Central Armed Police Forces, including civil employees who retired before 1 January 2016, will be revised.
- Changes in advances: Some advances have been abolished and some have been revised. For example, interest-free advances have been abolished with the exceptions of House Building Advance (HBA), Personal Computer Advance, Advances for Medical Treatment, LTC, TA for family of deceased employees, and TA on transfer or tour. The ceiling for HBA has been increased to Rs.25 lakh from Rs.7.5 lakh.
- New leave: A few of the existing leaves have been subsumed into a new leave. These are Special Disability Leave, Sick Leave, and Hospital Leave which have been subsumed into a new category of leave called the Work Related Illness and Injury Leave, or WRIIL. For the period of hospitalisation in an WRIIL, full allowances and pay will be granted to all employees.
- Central Government Employee Group Insurance Scheme (CGEGIS): There will be no change in the contributions to the scheme. This will result in the take-home salary of lower-level employees increasing by Rs.1,470. The Ministry of Finance has been tasked to design a customised group insurance scheme which will have a high-risk cover with a lower premium in order to provide a high level of social security to employees.
- Ex-gratia compensation: The next of kin of civil and defence services personnel will receive lump-sum ex-gratia compensation under a common regime. This will range from Rs.25-45 lakh across various categories which is revised from Rs.10 lakh to Rs.20 lakh currently.
The Pay Commission guidelines are applicable for employees across the following categories:
- Central Government employees, both non-industrial and industrial
- Defence forces personnel
- All India Services personnel
- Supreme Court employees and officers
- Union Territories personnel
- Members of regulatory bodies that are set up under the Acts of Parliament, other than the RBI
- Indian Audit and Accounts Department employees and officers
These changes are being rolled out by the government in phases, with some already being implemented since the time of announcement.
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