7th Pay Commission submits report, proposes 23.55% salary hike

New Delhi: 7th Central Pay Commission has recommended 23.55 percent hike in pay and allowances of government employees. Minimum basic pay of 18 thousand and maximum of Rs 2.5 lakh per month have been suggested by the Commission. Talking to reporters after submitting the report to Finance Minister Arun Jaitley in New Delhi yesterday evening, Commission's chairperson Justice AK Mathur said the pay revision will come into effect from January next year. He said the Commission has also recommended abolition of grade pay and pay band structure. He said the rate of annual increment for employees will be three percent.

Under the recommendation, the pay will go up by 16 percent, allowances by 63 percent and pension by 24 percent. The commission has also recommended increase in military service pay besides revised pension formula for civil employees including Central Armed Police Forces (CAPFs) and Defence Personnel retiring before 1st January 2016.

It also recommended abolition of 52 allowances and introduction of a Health Insurance Scheme. The Commission is also of the view that in case of death in the line of duty, the force personnel of CAPFs should be accorded martyr status, at par with the defence forces personnel.

The Commission also recommended One Rank One Pension for central government staffers, para



military as well as armed forces personnel. It suggested a Modified Assured Career Progression(MACP) for employees in which performance benchmarks has been made more stringent from Good to Very Good. The Commission has proposed that annual increments will 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.

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

Finance Minister Arun Jaitley said that the pay revision will impact 47 lakh serving employee and 52 lakh pensioners. He said it will cost public exchequer over one lakh crore rupees annually. The Minister said implementation of Pay Commission will impact fiscal deficit by 0.65 percent. Mr. Jaitley said a committee headed by Expenditure Secretary will be set up to go through the report for its implementation.

The Pay Commission was set up in February last year to revise remuneration of central government employees and pensioners. Its recommendations will also have a bearing on the salaries of the state government staff.