7th Central Pay Commission (CPC) headed by the Justice AK Mathur has recommended 23.55 % hike in pay & allowances of govt. employees. In this regard the commission has submitted its report to Union Finance Ministry in New Delhi and the recommended pay revision will come into effect from 1st January 2016.
Recommendations of 7th Central Pay Commission:
- Minimum basic pay of 18000 and maximum of 2.5 lakh per month. Abolition of grade pay & pay band structure.
- The rate of annual increment for employees will be 3 %. The pay will go up by 16 %, allowances by 63 % and pension by 24 %.
- Abolition of 52 allowances and introduction of a Health Insurance Scheme.
- One Rank One Pension scheme for central government staffers, para military as well as armed forces personnel.
- Increase in military service pay and revised pension formula for civil employees including Central Armed Police Forces and Defense Personnel retiring before 1st month of 2016.
Implications:
- The pay revision will impact 47 lakh serving employee and 52 lakh pensioners of the Central Government including in the Defence and Railways.
- It will cost public exchequer over 1 lakh crore rupees annually. The implementation of Pay Commission will impact fiscal deficit by 0.65 %.
- Finance Ministry is setting up committee headed by Expenditure Secretary to go through the report for its implementation.
Background :
The 7th Central Pay Commission (CPC) was set up in February 2014 to revise remuneration of employees and pensioners of central government including Defence and Railways. Its recommendations will also have a bearing on the salaries of the state government staff. The Central Pay Commission is constituted by the Union Govt. after almost every Ten years in order to revise the pay scales of employees. The 6th CPC under the Chairmanship of B.N.Srikrishna was approved in July 2006.
7th CPC submits report, proposes 23.55% salary hike in pay
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