7th Pay Commission – Govt Mulling to review the Salary of Central Government Employees Every Year

In the latest development related to the implementation of 7th Pay Commission recommendations, the government is reportedly considering automatic pay revision mechanism to keep salary and allowances of central government employees in balance with prices in the market. Finance Ministry officials involved in process of implementing recommendations of the 7th Pay Commission or 7th CPC said under this mechanism salary and allowances will be hiked when DA will rise above 50 percent.

The government is mulling not to form any Pay Commission for increasing salaries and allowances after the 7th Pay Commission. This was also suggested by the 7th Pay Commission when it submitted its recommendations to the government. The government should review the salary of central government employees every year rather than forming new pay commission after the long period of ten years, said the 7th Pay Commission. Instead of forming new central pay commission after the 7th Pay Commission, the government may revise salaries and allowances when DA crosses 50 per cent.

“The government is likely to want to take decisions on raising central government employees’ salaries and allowances when DA will rise above 50 per cent,” Finance Ministry officials hinted. “The government’s objective is to keep central government employees salaries and allowances in balance with prices in the market,” they added. They said the government will discontinue the practice of appointing pay commissions in future to suggest salary structure and other perks for all central government employees and pensioners.

Earlier in an interview, Justice AK Mathur, who led the 7th Pay Commission, said, “The government should review the salary of central government employees every year looking into the data available to it and based on the price index.” The salaries of central government employees can be reviewed on the basis of the Aykroyd formula which takes into consideration the changes prices of the commodities that constitute a common man’s basket. The Labour Bureau at Shimla reviews these changing prices of commodities periodically.

It simply means the government need not wait for ten years and form a pay commission to review salary and pension of the central government employees. Any changes required regarding pay and allowances would be made considering inflation after every year.

Serious consideration of abolition of any more pay commission by the government is coming forth, however the government still has not cleared the cloud which the finance minister promised to consider, i.e., CG employees demand for hike in fitment factor.