7th Pay panel report at a glance

GENERAL RECOMMENDATIONS

• Recommended date of implementation is January 1, 2016
• Minimum monthly pay set at Rs 18,000
• Maximum monthly pay Rs 2.25 lakh (apex scale), Rs 2.50 lakh (Cabinet secretary and equivalent)
• Pay bands, grade pay abolished, new pay matrix designed
• Rate of annual increment retained at 3%
• Performance-related pay recommended for all categories

FINANCIAL IMPLICATIONS

• Total financial impact for FY2016-17: Rs 1.02 lakh crore
• Impact on FY17 Union Budget: Rs 73,650 crore;Impact on Rail Budget: Rs 28,450 crore
• Overall increase in pay, allowances, pensions: 23.55 per cent
• Increase in pay: 16%; Increase in allowances: 63%, Increase in pension: 24%
• Expenditure-GDP ratio to be impacted by 0.65% points vs 0.77% for 6th Pay Commission

DEFENCE

• Military service pay increased across board
• Short-service commission (SSC) officers exit at 7-10 years, with terminal gratuity equivalent of 10.5 months
• SSC officers entitled to a fully-funded one year Executive Programme/M.Tech
• Revised formulation for lateral entry/resettlement of defence forces personnel
• Parity recommended between field and headquarters staff for similar functions
• Systemic change in cadre review for Group A officers recommended

ALLOWANCES

• Recommends abolishing 52 allowances altogether
• Another 36 allowances abolished as separate identities, but subsumed in existing allowances
• Allowances relating to risk and hardship to be governed by the proposed Risk and Hardship Matrix
• HRA recommended to be paid at the rate of 24%, 16%, 8% of new basic pay for class X, Y and Z cities, respectively
• HRA to be revised to 27%, 18%, 9% respectively, when DA crosses 50%, and further revised to 30%, 20%, 10% when DA crosses 100%
• Emphasis placed on simplifying the process of claiming allowances

INSURANCE SCHEMES AND MEDICAL FACILITIES

• Substantial increase for central government employees group insurance schemes' monthly deduction and insurance amount
• Introduction of a Health Insurance Scheme for employees and pensioners recommended

PENSION, COMPENSATION AND GRATUITY

• Revised OROP-type pension formulation for civil, defence and paramilitary employees
• Enhancement in the ceiling of gratuity from Rs 10 lakh to Rs 20 lakh
• Recommends reverting to a slab-based system for disability element
• Revision of rates of lump sum compensation for next of kin to be applied uniformly to defence, civil, paramilitary personnel
• Paramilitary personnel to be accorded martyr status in case of death in line of duty
• Strong pension grievance redressal mechanism recommended