7th Pay Comm lays report; Pitches for over 23% hike

RSTV Bureau
New Delhi: Finance Minister Arun Jaitley receiving the report of Seventh Pay Commission from its Chairman Justice A K Mathur in New Delhi on November 19, 2015. Photo - PTI

New Delhi: Finance Minister Arun Jaitley receiving the report of Seventh Pay Commission from its Chairman Justice A K Mathur in New Delhi on November 19, 2015.
Photo – PTI

The 7th Pay Commission has submitted its report to the Central government on Thursday. In a report presented to Union Finance minister Arun Jaitley by the Commission chairperson Justice AK Mathur, the Commission has recommended 23.55 per cent hike in salary, allowances and pension along with favouring a near-like ‘One Rank One Pension’ (OROP) policy for the civilian administration officers.

The implementation of the recommendations proposed by the 7th Pay Commission will cost more than Rs 1.02 lakh crore to the government.

However, the recommendations will benefit 47 lakh central government employees and 52 lakh pensioners, which will impact the Central Budget by Rs 73,650 crore and the Railway Budget by Rs 28,450 crore. The 900-page report has also recommended that the new scales be implemented from January 1, 2016.

“In percentage terms, the overall increase in pay and allowance and pensions over the business-as-usual scenario will be 23.55 per cent,” the report said, adding “the increase in pay will be 16 per cent, in allowances 63 per cent and in pension would be 24 per cent.”

Among its major recommendations are:

Indian_ currency1. The panel has recommended a 14.27 per cent increase in Basic Pay component. The hike has been billed as the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008. Besides, the 23.55 per cent increase includes hike in allowances.

2. The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000.

3. The maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000. For the Secretaries it has been fixed at Rs 2.25 lakh as against Rs 80,000 currently.

4. In a significant move, the 7th Pay Commission has suggested the abolition of the pay band and the grade pay, while retaining the annual increment of 3 per cent.

5. Without calling it ‘One Rank One Pension’ (OROP), the Pay Commission recommended a revised pension formulation for the central government employees, including Para-military personnel as well as for defence staff who have retired before January 1, 2016.

6. The report also favoured introduction of a health insurance scheme for staff and pensioners and doubling the gratuity ceiling to Rs 20 lakh.

7. The Chairman and other member Dr Rathin Roy recommended the age of superannuation for all central armed forces personnel to be raised to 60 years from current 58 years. Though there were differences within the Commission on this issue with another member Vivek Rae disagreeing to it.

8. In other recommendation, it said that under the Modified Assured Career Progression (MACP), the annual increments may 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.

9. It has also recommended introduction of the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents, reformed Annual Performance Appraisal Reports and some other broad Guidelines.

10. The Commission has also recommended a consolidated monthly pay package of Rs 4.50 lakh and Rs 4 lakh for chairpersons and members respectively of the regulatory bodies.

Speaking to the press after receiving the report, Finance minister Arun Jaitley said that the award of the pay panel will also benefit staff of autonomous bodies, universities and public sector units. He added that the impact of the recommendations would be an increase of 0.65 percentage on expenditure on salaries to GDP compared to 0.77 per cent in 6th Pay Commission.

The report will be studied by a secretariat headed by Expenditure Secretary before government takes a decision.

(With inputs from the PTI/Agencies)