7th Pay Commission in a nutshell - Likely approval today

7th Pay Commission in a nutshell – Cabinet to take up the approval process today (29th June 2016) – Central Government Employees expect modification in 7th Pay Commission recommendations in the areas such as minimum pay, fitment formula, annual increment, MACP, reversal of abolition of allowances proposed etc

News are pouring on the likely approval of 7th Pay Commission recommendations by Cabinet today. It’s really a long journey right from February 2014, when 7th Pay Commission was constituted by Govt to look in to pay and service related matters of Central Government employees including Railway Employees, Defence Personnel and Pensioners (Central and Defence). 7th Pay Commission submitted its report in November 2015. Subsequently, Govt formed Empowered Committee of Secretaries for processing the report of 7th Pay Commission.

All Staff Side associations and unions termed the 7th Pay Commission report as retrograde to Employees in the aspects of pay and service prospects. During the meetings conducted by the Empowered committee, NJCA, the joint body of staff side federations submitted memorandums for modification of the 7th pay commission recommendations in the areas of minimum pay, fitment formula, annual increment, MACP, reversal of abolition of allowances proposed etc.

However, it is still unclear whether all the demands of Staff Side has been taken in to consideration by Empowered Committee since it has not provided any details relating to charter of demands submitted by NJCA.

7th pay commission approval likely today In this background, NJCA has called for all India indefinite strike of all Central Government Employees, Railway Employees and Civilian Defence Employees on 11th July 2016, against inaction of Govt on Staff Side’s demand for proper negotiation on 7th CPC report.

As per latest developments, it is reported that Empowered Committee has already submitted its report to Finance Ministry and that Prime Minister has directed the Finance Ministry to put up Cabinet Note for its review and approval on 29th June 2016.

Let’s keep our fingers crossed on whether the demands of Staff Side have been taken in to consideration.

We have given below, the 7th Pay Commission report in a nutshell, for easy re-visit of details by readers.

1. Minimum Pay

Minimum Pay which was Rs. 7000 in the 6th Pay Commission has been fixed now at Rs. 18,000/-. A Multiplication factor of 2.57 has been used in arriving at this minimum pay.

2.Maximum Pay:

Maximum Pay of ₹2,25,000 per month for Apex Scale and ₹2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

3. Fitment Formula:

7th Pay Commission has formulated fitment formula as far as existing employees are concerned as 2.57. For instance, 7CPC pay of the employees who are presently in the pay band of 5200 – 20200 with grade pay of Rs. 1800, will be calculated by multiplying the factor of 2.57 with their existing basic pay (pay in pay band + grade pay)

4. Date of Effect of 7th Pay Commission Pay:

7th pay Commission pay will be effective from 1st January 2016.

5. Annual Increment:

7th Pay Commission has recommended for Uniform Annual Increment of 3%

6. Modified Assured Career Progression (MACP):

Existing Performance benchmarks for MACP is “Good”. 7th Pay Commission proposes that it should be “Very Good”. 10 years, 20 years and 30 years Slab continues.

Promotional hierarchy will be followed for granting MACP / Promotion

The Commission has also proposed that annual increments not be granted in the case of those employees who are not able to meet the benchmark either for MACP or for a regular promotion in the first 20 years of their service.

7. Military Service Pay (MSP):

The Military Service Pay, which is a compensation for the various aspects of military service, will be admissible to the Defence forces personnel only. As before, Military Service Pay will be payable to all ranks up to and inclusive of Brigadiers and their equivalents. The current MSP per month and the revised rates recommended are as follows:

	Present	Proposed
Service Officers	₹6,000	₹15,500
Nursing Officers	₹4,200	₹10,800
JCO/ORs	₹2,000	₹ 5,200
Non Combatants (Enrolled) in the Air Force	₹1,000	₹ 3,600

8. Short Service Commissioned Officers:

Short Service Commissioned Officers will be allowed to exit the Armed Forces at any point in time between 7 and 10 years of service, with a terminal gratuity equivalent of 10.5 months of reckonable emoluments. They will further be entitled to a fully funded one year Executive Programme or a M.Tech. programme at a premier Institute.

Lateral Entry/Settlement: The Commission is recommending a revised formulation for lateral entry/resettlement of defence forces personnel which keeps in view the specific requirements of organization to which such personnel will be absorbed. For lateral entry into CAPFs an attractive severance package has been recommended.

Headquarters/Field Parity: Parity between field and headquarters staff recommended for similar functionaries e.g Assistants and Stenos.

9. Cadre Review:

Systemic change in the process of Cadre Review for Group A officers recommended.

10. Allowances:

The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.

11. Risk and Hardship Allowance:

Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance.

12. House Rent Allowance:

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 lakh and above	X	24
50–5 lakh	Y	16
Below 5 lakh	Z	8

Transport Allowance:

Pay Level	Higher TPTA Cities (₹ pm)	Other Places (₹ pm)
9 and above	7200+DA	3600+DA
3 to 8	3600+DA	1800+DA
1 and 2	1350+DA	900+DA

The following table would be useful to equate the existing pay band / Grade pay structure with the New Pay level

Levels as per the Pay Matrix

Existing Pay Bands	Existing levels of Grade Pay	Available for*	New Levels
PB-1	1800	C	1
	1900	C	2
	2000	C,D	3
	2400	C	4
	2800	C,D	5
PB-2	3400	D	5A
	4200	C,D	6
	4600	C,D	7
	4800	C,D	8
	5400	C	9
PB-3	5400	C,D,M	10
	5700	M	10A
	6100	D	10B
	6100	M	10B
	6600	C,D,M	11
	7600	C	12
PB-4	7600	M	12
	8000	D	12A
	8400	M	12B
	8700	C	13
	8700	D	13
	8900	C	13A
	8900	D	13A
	9000	M	13B
	10000		14
HAG			15
HAG+			16
Apex			17
Cabinet Secretary, Defence Chiefs			18
*C: Civil; D: Defence; M: Military Nursing Service (MNS)

13. Advances:

All non-interest bearing Advances have been abolished.

Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to ₹25 lakhs from the present ₹7.5 lakhs.

Central Government Employees Group Insurance Scheme (CGEGIS):

The Rates of contribution as also the insurance coverage under the CGEGIS have remained unchanged for long. They have now been enhanced suitably. The following rates of CGEGIS are recommended:

Pay level	Present Insurance	Proposed Insurance	Present Monthly Deduction	Proposed Monthly Deduction
10 and above	1,20,000	50,00,000	120	5000
6 to 9	60,000	25,00,000	60	2500
1 to 5	30,000	15,00,000	30	1500

14. Health Insurance Scheme

The Commission strongly recommends the introduction of health insurance scheme for Central Government employees and pensioners. In the interregnum, for the benefit of pensioners residing outside the CGHS areas, the Commission recommends that CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. This would involve strengthening of administrative capacity of nearest CGHS centres. However, this step will go a long way in ameliorating the pending grievances of these pensioners.

The Commission recommends that the remaining 33 postal dispensaries should be merged with CGHS. The Commission further recommends that all postal pensioners, irrespective of their participation in CGHS while in service, should be covered under CGHS after making requisite subscription.

15. Fixation of Pension:

The past pensioners shall first be fixed in the Pay Matrix being recommended by the Commission on the basis of Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the pay matrix.

This amount shall be raised to arrive at the notional pay of retirees, by adding number of increments he/she had earned in that level while in service at the rate of 3 percent.

In the case of defence forces personnel this amount will include Military Service Pay as admissible.

Fifty percent of the total amount so arrived at shall be the new pension.

An alternative calculation will be carried out, which will be a multiple of 2.57 times of the current basic pension.

The pensioner will get the higher of the two.

16. Gratuity

7th Pay Commission has proposed for Enhancement in the ceiling of gratuity from the existing ₹10 lakh to ₹20 lakh. The Commission has also recommended that the ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent.

17. Disability Pension for Armed Forces:

The Commission has recommended for reverting to a slab based system for disability element, instead of existing percentile based disability pension.

18. NPS:

7th Pay Commission has recommended for improving the present National Pension System in view of many grievances reported.

19. Leave:

Casual Leave : No Change recommended

Chile adoption Leave : No Change

Child Care Leave: Commission recommends that CCL should be granted at 100% of salary for first 365 days but at 80% for next 365 days. The Commission has also recommended for granting Child Care Leave Single Male Parents

Commuted Leave: No Change

Earned Leave : No Change with respect to encashment

Leave No due : No Change

Paternity Leave : No Change

Study Leave : No Change

20. GPF (General Provident Fund)

Status quo is recommended as far as GPF is concerned

21. Children Education Allowance:

On the whole, the Commission is of the view that quantum of CEA should be calibrated in such a manner that the main objective is met without the government entering into the field of subsidizing private education. Hence, taking into account the various items of expenditure
that are reimbursed as a part of this allowance, the following is recommended:

Component	Recommended rate	Remarks
CEA (₹ pm)	1500×1.5 = 2250	Whenever DA increases by 50%, CEA shall increase by 25%
Hostel Subsidy (₹ pm)	4500 x 1.5 = 6750 (ceiling)	Whenever DA increases by 50%, Hostel Subsidy shall increase by 25%