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7th Pay panel report at a glance

Recommended date of implementation is January 1, 2016

Business Standard  |  New Delhi 

Chairman of the Seventh Pay Commission  A K Mathur (right) submitted the 900-page report to Finance Minister Arun Jaitley, in New Delhi on Thursday
Chairman of the Seventh Pay Commission A K Mathur (right) submitted the 900-page report to Finance Minister Arun Jaitley, in New Delhi on Thursday

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

First Published: Fri, November 20 2015. 00:24 IST
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