7th Pay Commission: Notification issued; central govt employees, pensioners to get increased payout for August

Zee Media Bureau/Ajeet Kumar

New Delhi: The Union government has issued notification for the implementation of the 7th Pay Commission recommendations related to the hike in basic pay and pension.

With the publication of notification, dated July 25, 2016,  around 1 crore individuals — 33 lakh central government employees, 14 lakh armed forces personnel, and 52 lakh pensioners will get the increased payout for their August salaries.

Gazette Notification has been made with regard to 7th Pay Commission Recommendations by the Ministry of Finance. — Ministry of Finance (@FinMinIndia) July 26, 2016

The 7th Pay Commission recommendations on basic pay and pension hike will be effective from January 1, 2016, according to the gazette. The arrears on this account will be paid during the financial year 2016-2017. 

"With regard to fixation of pay of the employee in the new Pay Matrix as on 1st day of January, 2016, the existing pay (Pay in Pay Band plus Grade Pay) in the pre-revised structure as on 31st day of December, 2015 shall be multiplied by a factor of 2.57," the notification said.

The notification said as regards to the annual increment, instead of the earlier July 1, now there will be two dates of January 1 and July 1. In a year the employee will be entitled for increment at one of these dates depending on his date of appointment, etc.

The Union Cabinet had earlier cleared the recommendations of the 7th Pay Commission headed by A K Mathur on June 29 in respect of the hike in basic pay and pension. However, the decision on 7th Pay Commission suggestions relating to allowances has been referred to a Committee headed by Finance Secretary.

The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing allowances will continue to be paid at the existing rates.

After taking into account the DA at prevailing rate (125 percent of basic pay), the salary/pension of all government employees/pensioners will be raised by at least 14.29  percent as on 01.01.2016. The entry-level pay has been recommended to be raised to Rs 18,000 per month, from the current Rs 7,000, while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from the current Rs 90,000.

As far as starting salary of a freshly recruited Class I officer is concerned, it will be Rs 56,100 per month. Chiefs of regulatory bodies including SEBI and TRAI will now get a consolidated pay package of Rs 4.5 lakh per month, while their full-time members will get Rs 4 lakh each.

Rate of increment has been retained at 3 percent. This will benefit the employees in future on account of higher basic pay as the annual increments that they earn in future will be 2.57 times than at present.

The recommendation of "withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service" has been "accepted", the notification said.  The benchmark for performance appraisal for promotion and financial upgradation has also been enhanced to "very good" from "good" level.

Accepting the Pay Commission recommendation of maintaining existing formula and methodology for calculating Dearness Allowance, the government notification said, "The reference base for calculation of Dearness Allowance after coming into force of the revised Pay structure shall undergo change accordingly and will be linked to the average index as on January 1, 2016."

As estimated by the 7th CPC, the additional financial impact on account of implementation of all its recommendations in 2016-17 will be Rs. 1,02,100 crore. There will be an additional implication of Rs. 12,133 crore on account of payments of arrears of pay and pension for two months of 2015-16.