In accordance with the past precedents for periodic pay revision of central government employees, the Govt of India appointed 7th Pay Commission in February 2014 with Justice Shri Ashok Kumar Mathur as Chairman and the following persons as members of the commission:

  • Shri Vivek Rae
  • Dr.Rathin Roy
  • Smt Meena Agarwal

 

The 7th Pay Commission’s terms of reference included to examine, review, evolve and recommend changes in the pay structure and compensation packages of the central government employees including All India Services, Union Territories, officers in the Indian Audit and Accounts Departments and officers and employees in th Supreme Court. The Commission submitted its report int he month of November 2005, with record speed of less than 20 months.

On 28 June 2016 Govt of India approved the recommendations and the new pay scales are going to reflect in the monthly salary of employees from July 2016. The scales will be effective retrospectively from 1st January 2016, and the arrears will be disbursed in the month of October-November.

Revised Salary Structure as per 7th Pay Commission

Old Scale New Basic Pay 7th Pay Commission Salary New HRA Class X/Y/Z City
Pay Band 1 5200-20200
Old Grade Pay
1800 18000 5400/3600/1800
1900 19900 5970/3980/1990
2000 21700 6510/4340/2170
2400 25500 7650/5100/2550
2800 29200 8760/5840/2920
Pay Band 2 9300-34800
4200 35400 10620/7080/3540
4600 44900 13470/8980/4490
4800 47600 14280/9520/4760
5400 53100 15930/10620/5310
Pay Band-3 15600-39100
5400 56100 16830/11220/5610
6600 67700 20310/13540/6770
7600 78800 23640/15760/7880
Pay Band-4 37400-67000
8700 118500 35550/23700/11850
8900 131100 39330/26220/13110
10000 144200 43260/28840/14420
Higher Administrative Grade (HAG)
67000 182200 54660/36440/18220
Higher Administrative Grade (HAG+)
75500 205400 61620/41080/20540
APEX Grade
80000 225000 67500/45000/22500
Cabinet Secretary Level
90000 250000 75000/50000/25000

 

Impact of 7th Pay Commission’s Recommendations on Government and Employees

In a report submitted to the Union Finance Minister in 2015, the Seventh Central Pay Commission recommended a 23.55 per cent hike in salaries, allowances, and pension. The Commission’s report recommended a 16 per cent increase in basic pay and a hike of 63 per cent in allowances. For pension holders, the Commission recommended a 24 per cent hike.

The recommendations of the 7th Pay Commission will benefit 47 lakh salaried central government employees and 52 lakh pensioners who will witness a spike in salary and bonuses. However, it is likely to pose a financial burden of Rs 1.02 lakh crore (around 0.65 per cent of the GDP) for the government.

Finance Minister Arun Jaitley had admitted earlier that the impact of implementing the recommendations would last for two to three years.

Discontentment Over Pay Commission’s Recommendations

Central government employees’ unions planned to go on 3-day agitation starting 19 January to protest over the pay matrix recommended by the Pay Commission. The union is unanimous in their dissatisfaction over the fact that the take-home pay is very much less if compared with previous pay commissions. They demand a change in the pay matrix and want the Central Government to accept increase in Minimum Pay.

Facts about the 7th Pay Commission

  • Seventh pay commission is headed by Justice A K Mathur. The other members of the Pay Commission are Vivek Rae and Rathin Roy. Meena Agarwal is Secretary of the Commission.
  • The Pay Commission is constituted almost every 10 years to revise the pay scale of central government employees.
  • The recommendations of the Pay Commission are often adopted by states with some modifications.
  • Minimum basic pay for central government employees was recommended at Rs 18,000. Maximum pay recommended in Rs 2.25 lakh per month.
  • Pay Commission has recommended 3 per cent annual appraisal and 24 per cent hike in pension for central government employees.