7th Pay Commission: Central employees will soon get more salary, know why

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7th Pay Commission: Central employees will soon get more salary. 7th Pay Commission, 7th CPC Latest News, Central Government Employees: The current rate is 21 per cent but since April last, workers and pensioners are getting less DA. The government has implemented this arrangement of this DA till June 2021. In such a situation, there is hope that the government can soon give good news on this.

7th pay commission : 7th Pay Commission, 7th CPC Latest News, Central Government Employees: Central government employees will soon get increased salary. With this, pension will also be increased soon. In fact, the employees and pensioners who are frustrating on dearness allowance (DA) can get relief soon. In the beginning of last year due to the Corona crisis, the government implemented the old DA rate (17%).

7th pay commission latest news current Rate

The current rate is 21 per cent but personnel and pensioners are getting less DA since last April. The government has implemented this arrangement of this DA till June 2021. In such a situation, there is hope that the government can soon give good news on this.

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DA is extended twice a year, but due to the Corona crisis, it has been banned for a year and a half (from April to June 2021). If DA increases, it will benefit 50 lakh employees and 61 lakh pensioners.

7th pay commission latest news current Rate and corona crisis

However, after the Corona crisis, all eyes are on the government’s announcement. However, some media reports are also claiming that the government can take a decision on this before Holi.

The government has given a big relief on the family pension amid disappointment over the DA. The Center has increased the family pension limit from Rs 45 thousand to Rs 1.25 lakh per month. The government has increased this pension by two and a half times. It was long sought by the employees. The government has also shared information in this regard in Parliament.

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Latest update on 7th pay commissionCentral Government has announced the revival of Special Festival Advance Scheme for employees and this scheme will be effective till March 31, 2021.Modi Govt Extended the LTC for the period of next two years till September 25, 2022 as a Diwali Gift.

A Pay Commission is set up by the Government of India and it recommends the changes in the salary structure of central government employees. Millions of government employees are waited for the 7th Pay commission to be implemented as it will increase their allowances, salary, and other benefits. The Current 7th Pay Commission was to be implemented in January 2016. However, it had to be delayed

What is a Pay Commission?

The Government of India set up the Pay Commission to recommend changes in salary structure of central government employees. So far, seven pay commissions have been set up since India received its independence to review and recommend changes on pay structure of all civil and military servants of the Government of India. P. Chidambaram, the then Former Finance Minister announced that the 7th Pay Commission was approved by the then Prime Minister, Manmohan Singh and that it will be implemented by January 2016. However, due to some obstacles, the 7th Pay Commission was not implemented by the recommended date of implementation.

In the month of July, 2016, AK Mathur headed the Seventh Pay Commission and submitted a report on it to Finance Minister Arun Jaitley. The report suggested a 23.55% hike in pay and allowances of government employees. If the 7th pay commission is implemented, government employees will benefit from a pay hike and other benefits. The Government of India is planning to implement the 7th Pay Commission’s recommendations by January 2017. Uttar Pradesh has already approved the 7th Pay Commission and have announced that it will be implemented by January 2017.

Seventh Central Pay Commission of India

Employees and staffers of the Central Government in India receive their pay according to the 7th Pay Commission System. After the Union Budget presented on 5 July 2019, central government employees are waiting for an update from the 7th Pay Commission that is generally made every 6 months. This news is related to an increase in their Dearness Allowance (DA). In January 2019, the government had raised the DA for government employees by 3%. Financial experts are now expecting an increase of 5% in the DA.

Highlights of 7th Pay Commission

  • Recommended minimum pay for government employees: The minimum pay of a newly recruited government employee at entry level is increased from Rs.7,000 to Rs. 18,000 per month. For a newly recruited Class I Officer, the minimum salary is increased to Rs.56,100 per month.
  • Recommended maximum pay for government employees: The 7th Pay Commission also recommends to increase the maximum pay for government employees to Rs.2.25 lakhs per month for Apex Scale and Rs.2.5 lakhs per month for Cabinet Secretary and others working at the same level.
  • Pay Matrix: Considering the issues that exist in the Grade Pay Structure, the 7th Pay Commission has recommended a new pay matrix. Once the 7th Pay Commission is implemented, the status of a government employee will not be decided by Grade Pay but by the level in the new Pay Matrix.
  • New Pay Structure: Ever since Central Government employees heard about the Pay Matrix system, they have questions about their grades and levels. The New Pay Structure recommended by the 7th Pay Commission have included all existing levels and have not introduced any new levels.
  • Work Related Illness and Injury Leave(WRIIL): The Pay Commission recommends full pay and allowances to be granted to all employees who are hospitalised due to WRIIL.
  • Fitment: The 7th Pay Commission recommends a uniform Fitment Factor to eliminate partiality and discrimination in the system. The Pay Commission has recommended a uniform Fitment Factor of 2.57 for all employees.
  • The fitment factor pertaining to the 7th Central Pay Commission is likely to be set at 3.00 times from an earlier 2.57 times. However, in contrast with the recommendations made by the 7th CPC, the employees are currently demanding a hike of 3.68 which essentially increases the fitment factor by three times.
  • Dearness Allowance: In what came as a huge relief to government employees, the Dearness Allowance witnessed a hike of 2% recently. This move/act by the Union Cabinet is said to benefit more than 50 lakh Central Government employees and around 55 lakh pensioners and staffers. This hike was mostly focused on Central Government employees as they are most likely to bear the brunt of factors such as inflation. The raise went straight off to 7% from an earlier 5%.
  • Annual increment: The Pay Commission has suggested to retain the annual increment of 3% p.a.
  • Modified Assured Career Progression(MACP): The 7th Pay Commission aims at improving the quality of services offered by the Government of India and thereby focuses on individual performance. According to the report, performance benchmarks of MACP has been altered and made stricter. They have made the performance indicator stricter by adding “Very good” performance level which was “Good” before. The report goes on to recommend that no annual increments should be given to employees who do not meet their performance level and no promotions will be given if MACP is low for the first 20 years in service.
  • Military Service pay(MSP): The 7th Pay Commission recommends MSP to be paid for Defence Personnel only. MSP is the compensation paid to people offering military service in India. MSP will be payable for all ranks inclusive of Brigadiers and people at the same level.
  • Allowances: The Cabinet has examined a total of 196 allowances which are currently present and have abolished 51 allowances, retaining 37 allowances.
  • House Rent Allowance: As the 7th Pay Commission aims at increasing the basic pay of government employees, the Pay Commission has recommended that the House Rent Allowance also increase by 24%. The Commission also states that HRA will increase to 27%, 18%, and 9% when DA (dearness allowance) crosses 50%. HRS will further increase and will be paid at 30%, 20%, and 10% when DA crosses 100%.
  • Advances: Apart from Personal Computer Advance and House Building Advance, 7th Pay Commission has abolished all non-interest bearing advances. It is also noteworthy that House Building Advance has been increased from Rs.7.5 lakhs to Rs.25 lakhs.
  • Central Government Employees Group Insurance Scheme (CGEGIS): The Pay Commission has made some changes to Central Government Employees Group Insurance Scheme. The recommended rates are as follows:
Level of employeePresent monthly deduction in RupeesPresent insurance amount in RupeesRecommended monthly deduction in RupeesRecommended insurance amount in Rupees
10 and aboveRs.120Rs.1,20,000Rs.5000Rs.50,00,000
6 to 9Rs.60Rs.60,000Rs.2500Rs.25,00,000
1 to 5Rs.30Rs.30,000Rs.1500Rs.15,00,000

Medical changes: The 7th Pay Commission has recommended a Health Insurance Scheme for Central Government employees and pensioners. The report also recommends cashless medical benefit for pensioners outside CGHS area.

Pension: The Commission suggests a revision in the current pension scheme. They recommend a revised pension formulation for civil employees including CAPF and Defence Personnel who have retired before 01.01.2016. The new formulation will focus on bringing parity between existing pensioners and current retirees. The new pension will be calculated by placing the past pensioners on the new Pay Matrix system. Later, the pension amount will be arrived at by adding the number of increments a pensioner has earned in that level while in active service at the rate of 3% p.a. 50% of the so arrived amount will be the new pension. A pensioner will get a multiple of 2.57 times the current basic pension.

Gratuity: The Commission recommends the ceiling of gratuity to be increased from the current Rs.10 lakh to Rs.20 lakh. They further recommend that the ceiling on gratuity may be raised by 25% when the DA rises by 50%.

Disability Pension for Armed Forces: Instead of the current percentile based disability pension regime, The Commission has recommended to implement a slab-based system for disability element.

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