To protect the interest of Central government employees, the Government of India set up a body called Pay Commission. Pay Commissions extends recommendations regarding the changes in the salary structure of the employees of the Indian government. Periodically, this body works to provide relevant changes in the pay matrix of the existing and retired government employees. It is largely concerned with the pay structure of all civil and military division of the Government of India.
Pay commissions are set up regularly and they are provided with at least 18 months of time from the date of conception to make its recommendations.Since India’s independence, seven pay commissions have been designed. On the basis of which, recommendations have been implemented by the government of India, subsequently making changes to pay and pension structures.
The first pay commission was set up in January 1946 under the chairmanship of Srinivasa Varadachariar. The 1st pay commission was tasked to create recommend a salary structure for the civil employees. As for Armed forces, in the post war era, a special Post-War Pay Committee for the Armed Forces was created.
The second Pay Commission was created in 1957, the third came in 1970, the fourth was constituted in 1983, the fifth in 1994, and the sixth in 2006. The latest and the current, the 7th Central Pay Commission was constituted in February 2014, after Prime Minister Manmohan Singh’s approval. This committee was tasked to review and analyze the pay structure of all central government civilian employees as well as defense forces in India under the chairmanship of Retired Judge of the Supreme Court and Retired Chairman of the Armed Forces Tribunal Ashok Kumar Mathur. He was joined by Retd. Secretary of Ministry of Petroleum and Natural Gas Vivek Rae, Dr. Rathin Roy, Director of NIPFP, and Meena Agarwal OSD of Department of Expenditure, Ministry of Finance. The first report was submitted on 19 November 2015. And it was implemented by the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA).
7th pay commission salary slab as per the report recommended sought an overall 23.55 % hike in salaries, allowances, and pensions. Furthermore, report suggested a salary raise of 16% and Central government employees could be raised by 16 % and raise in allowances and pensions by 63 % and 24 %, respectively, for all central government employees. Unfortunately, the 63% raise in allowance did not receive approval from the government. Other features of the 7th Pay Commission included:
- The minimum pay for entry-level government employee was increased to Rs. 18,000 per month
- For newly appointed Class 1 officer, the minimum salary is Rs.56,100 per month.
- The maximum pay for government employees is increased and fixed at Rs.2.25 lakhs per month for Apex Scale.
- The Maximum salary for Cabinet Secretary and others working at the same level is fixed at Rs. 2.5 lakh.
- A new system of pay matrix is implemented to substitute the current system operating on Grade Pay and pay band. For which, a factor of 2.57 was applied to the existing salary to derive the new pay scales.
- No changes were made to the annual increment rate. It remained 3% as per the 6th pay commission.
Apart from this the recommendations covered work-related illness and injury leave, Fitment facto, dearness allowance, military service pay, house rent allowances, advances, Central Government Employees Group Insurance Scheme, medical charges, and more.
Pay Commission examined 196 allowances. Out of which, it eradicated 51 allowances and retained 37.
Pension Recommendations Under 7th Pay Commission
As per the recommendations, the commission suggested a revision that worked to bring parity between existing pensioners and current retirees. The personnel that retired before January 2016 will be placed on the new Pay Matrix system along with the new pensioners to create uniformity. With the help of new formula, the pension will get a multiple of 2.57 times of their basic pension.
More recommendations suggested health Insurance Scheme for Central Government employees as well as pensioners. This includes a cashless medical benefit for pensioners outside CGHS. And For retiring personnel, gratuity was increased from Rs. 10 lakhs to 20 lakhs. And if Dearness Allowance raises by 50%, the gratuity can be increased by 25%.
Latest News on Seventh Pay Commission for Central Govt Employees
As per the 7th pay commission latest news for pensioners and Central Government employees, the center increased the Dearness Allowance by 3%, making it 12%. The last increase made it to 9% in August 2018. With retroactive effect, it makes employees eligible for an arrear.
7th pay commission latest news for pensioners reveals the latest move by the Government of Maharashtra that has announced raise in the pension of pensioners in certain age group including pensioners at the age of 80 and above. These changes are said to be made in the light of recommendations by 7th Pay Commission.
Meanwhile, the Ministry of Finance has finally agreed to deal with the demand of army personnel to make changes in their tax scheme by exempting ration money, and risk and hardship allowance. These changes will benefit Central Reserve Police Force (CRPF), Border Security Force (BSF), Central Industrial Security Force (CISF) and Indo-Tibetan Border Police (ITBP) and Sashastra Seema Bal (SSB). Changes are expected to be implemented under the new government.
For central government employee unions have made several demands such as a hike in Fitment factor. A few demands are expected to fulfill including several pay hikes by the Centre and state governments.
The Ministry of Personnel, Public Grievances and Pensions has recently agreed to increase in incentive highly qualified central government employees. At the same time, several governments are considering arrears for their employees considering the hike in the DA.