Modi Cabinet approves 7th Pay Commisison with 23.55% hike

New Delhi: The Union Cabinet approved 7^th Pay Commission, on Wednesday, benefitting for over 1 crore government employees and pensioners with a 23.55% hike in pay, allowances and pension of government employees.

The 7^th central pay commission will be implemented from January 1, 2016.

The decision was taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

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Highlights:

• A total of 98 lakh employees -- 47 lakh central government employees and 52 lakh pensioners – are benefitted from the move.
• The 7th Pay Commission report will be effective from January 1, stated a government official, adding that the Cabinet will decide if the arrears for the six months have to be paid in one go or in installments.
• In order to bring in greater transparency, the report has recommended replacing the present system of pay bands and grade pay with a new pay matrix. Of the total financial impact of Rs 1,02,100 crore, the increase in pay would be Rs 39,100 crore, increase in allowances Rs 29,300 crore and increase in pension Rs 33,700 crore.
• Rs 73,650 crore of the outgo will be borne by the general budget and Rs 28,450 crore by the Railway Budget.
• The entry level pay has been raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000.
• A 14.27 percent hike was recommended by the pay panel for basic pay at junior level, in November last, which was the lowest in 70 years.
• Earlier, the government had formed a group of secretaries headed by Cabinet Secretary PK Sinha, which had recommended certain changes into the commission.
• The Cabinet, however, approved the initial recommendations of 7th CPC and by and large ignored suggested changes by the group of secretaries.