Facts 7th Pay Commission Big Salary Hike for Government Employees

Facts 7th Pay Commission Big Salary Hike for Government Employees

Government of India Union Cabinet on Wednesday approved the recommendations made by the final 7th Pay Commission.

The Commission was set up by the former UPA government in February 2014 to revise remuneration of the central government employees.

The Commission had recommended 23.55 percent overall hike in salaries, allowances and pension involving which the Cabinet has approved.

the Union Cabinet today cleared 23.6 percent hike in salary as recommended by the 7th Pay Commission.

The hike is built around the recommendation for a 14.27 per cent hike in basic pay.

The hike is expected to cost the taxpayer an additional Rs. 1 lakh crore annually, or nearly 0.7 per cent of GDP.

The move will impact nearly 50 lakh employees and 58 lakh pensioners. The changes are likely to be implemented from January 1

The highest pay is pegged at Rs. 2, 25,000 per month for apex scale and Rs. 2,50,000 per month for cabinet secretary and others at the same pay level.

The rise will be more than double as the current pay in this scale is Rs. 90,000 per month.

The present system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed. Grade Pay has been subsumed in the pay matrix. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix.

The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the Business Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs 29,300 crore and increase in pension would be Rs 33,700 crore.

The Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 per cent of the new Basic Pay for Class X, Y and Z cities respectively.

The Commission also recommends that the rate of HRA will be revised to 27 per cent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 per cent and 10 per cent when DA crosses 100 per cent.

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

Enhancement in the ceiling of gratuity from the existing Rs 10 lakh to Rs 20 lakh. The ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent

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.

The Commission has recommended a consolidated pay package of Rs 4,50,000 and Rs 4,00,000 per month for Chairpersons and Members respectively of select Regulatory bodies.

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Wednesday, June 29, 2016

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