7th Pay Commission Annouced
7th Pay Commission announces bonanza for central govt staff
New Delhi,20 November: The Seventh Central Pay Commission has proposed a hefty 23.55 per cent hike in salary, allowances and pension for 4.8 million government employees and 5.5 million pensioners. If accepted, the recommendations of the commission, headed by retired judge A K Mathur, would be effective from January.The recommendations, if implemented as it is, will put a burden of Rs1.02 lakh crore to Rs73,650 crore on the Central Budget and Rs28,450 crore on Railway Budget.
A minimum pay of Rs18,000 per month and a maximum of Rs2.5 lakh per month has been suggested by the Commission. The recommendations will be implemented from January 1, 2016. .The recommended hike, contained in a 900-page report, is over 11 percentage points lower than the 35 per cent suggested by the sixth pay commission. The Seventh Pay Commission, headed by Justice AK Mathur on Thursday, submitted its report to Finance Minister Arun Jaitley The panel also suggested virtual one-rank, one-pension (OROP) for civilian staff too. Commenting on the suggestions of the pay panel, Arun Jaitley said, that the recommendation will impact 47 lakh serving Government employees, 52 lakh pensioners, including Defence personnel. The recommendations will also benefit staff of autonomous bodies, universities and public sector units, Jaitley said after receiving the report. “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. Within this, the increase in pay will be 16 per cent, 63 per cent in allowances and 24 per cent in pension, it said. The total salary and pension bill of the Central Government, which will also include railway employees, will go up from estimated Rs4.33 lakh crore to Rs5.35 lakh crore during 2016-17.
The panel has suggested abolition of the pay band and the grade pay, though it retained the annual increment of 3 per cent. It has also recommended a fitment factor of 2.57 which will be applied uniformly to all employees. Without calling it OROP, the Pay Commission recommended a revised pension formulation for the Central Government employees, including paramilitary personnel as well as for Defence staff who retire before January 1, 2016. The panel chief suggested the age of superannuation for all central armed forces personnel to be raised to 60 years from the current 58 years, but another member Vivek Rae did not agree with it. The formulation will bring parity among past pensioners and current retirees for the same length of service in the pay scale at the time of retirement. In a significant recommendation, the panel enhanced the ceiling of gratuity from the existing Rs10 lakh to Rs20 lakh. And the same will be raised by 25 per cent whenever DA is raised by 50 per cent.
In the new pay structure, the grade pay has been subsumed in the pay matrix and the status of the employee, now determined by grade pay, will now be determined by the level in the matrix. Introduction of a health insurance scheme for employees and pensioners has been recommended. Meanwhile for the benefit of pensioners outside the CGHS areas, CGHS should empanel those hospitals which are already empanelled under CS(MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. All postal pensioners must be covered under CGHS. All postal dispensaries should be merged with CGHS. Under the Central Government employees’ group insurance scheme, the rates of contribution as well as insurance coverage have now been enhanced suitably. Monthly deduction has been raised from Rs120 per month to Rs5,000 and insurance cover from Rs 1.2 lakh to Rs 50 lakh for senior most level. At the bottom of the matrix, it has been raised from Rs30 per month to Rs1,500 and the cover hiked from Rs30,000 to Rs15 lakh. The Commission recommended abolition of all non-interest bearing advances and increased the limit for interest-bearing advances for buying home from Rs7.5 lakh to Rs25 lakh.
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