7th Pay Commission: All you want to know in brief

| April 3, 2018

7th Pay Commission:  There has been long deliberation on the recommendations and despite salary  revisions  many employees are not happy with the actual raise that was granted then granted. Nearly 50 lakh government employees got the benefits of the salary revision in 2016. However, some employees unions are demanding an increase in the minimum salary from Rs 18,000 that the government has agreed to a much higher level of Rs 26,000








7th Pay Commission: There is still a lot of speculation going on regarding fitment factor and other benefits that were recommended in the pay panel. There has been long deliberation on the recommendations and despite salary revisions many employees are not happy with the actual raise that was granted then granted. Nearly 50 lakh government employees got the benefits of the salary revision in 2016. However, some employees unions are demanding an increase in the minimum salary from Rs 18,000 that the government has agreed to a much higher level of Rs 26,000. While that continues to be a bone of contention, here we provide a brief look into the Pay Commission’s highlights in brief.




The 7th Pay Commission revised the pay structures of government employees and the report was duly submitted and accepted by the Centre. Since independence seven pay commissions have been constituted to review and make recommendations on the work and pay structures. The recommendations of the commission are also adopted by states with some modifications. The 7th Pay Commission was constituted in February 2014 under the chairmanship of Former Supreme Court Justice Ashok Kumar Mathur. It submitted the report to Finance Minister Arun Jaitley in  November 2015. The recommendations were approved by the Union Cabinet in June 2016.

In short, minimum pay for government employees was set at Rs 18,000 per month and the maximum for Apex scale was to be Rs 2,25,000 per month while for Cabinet Secretary, the limit was set at 2,50,000 per month. In other matters related to the salary, the increase in allowances was 63 percent and pension 24 percent. A fitment factor of 2.57 which will be applied uniformly to all employees. The recommendations abolished 52 allowances and asked for introduction of a Health Insurance Scheme.  Hardship Matrix would look after the allowances relating to Risk and Hardship henceforth.




The pay panel presented a new pay matrix and that led to the then the existing system of pay bands and grade pay to be dispensed. Grade Pay was subsumed in the pay matrix. The status of the employee, determined by grade pay, was henceforth to be determined by the level in the pay matrix.
Gratuity ceiling was enhanced from existing Rs 10 lakh to Rs 20 lakh and ceiling would be raised by 25 percent whenever DA rises by 50 percent.

Panel had recommended an increase in the Military Service Pay and revised pension formula for civil employees including Central Armed Police Forces (CAPF) and Defence Personnel retiring before 1 January 2016. One Rank One Pension proposed for civilian government employees online of OROP for armed forces.

Military Service Pay (MSP), which is a compensation for the various aspects of military service, was now admissible to the defence forces personnel only.

Short service commissioned officers would now be allowed to exit the armed forces at any point in time between 7 to 10 years of service and a systemic change in the process of Cadre Review for Group A officers recommended.

Panel had recommended that House Rent Allowance (HRA) be paid at the rate of 24 percent, 16 percent and 8 percent of the new Basic Pay for Class X, Y and Z cities respectively. The rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent.

It recommended the abolition of all non-interest bearing advances and increased the limit for interest-bearing advances for buying a home from 7.5 lakh rupees to 25 lakh rupees.

Panel introduced the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents and Annual Performance Appraisal Reports.

Category: News, Seventh Pay Commission

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