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7th Pay Commission Recommendations – Salient Features

7th Pay Commission Recommendations – Salient Features

GConnect Team November 20, 2015 7th Pay Commission

7th Pay Commission Recommendations – Salient Features at the first look of the 7th CPC report

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.

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
Class of
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
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%

The allowance will continue to be double for differently abled children.

Also, the extension of scope of the allowance beyond Class XII was not accepted by 7th Pay Commission

Source: 7th Pay Commission Report


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