India

7th Pay Commission recommendations approved by the Cabinet

29 Jun 2016 | By Nandita

The Union Cabinet has approved the recommendations made by the 7th Pay Panel.

The approval is expected to see an elevation in the basic pay for over 1 crore government employees pensioners.

The hike in remunerations will rise by at least 23.5 per cent, as recommended.

The changes are likely to be implemented from January 1 this year.

In context: Union Cabinet approves 7th Pay Commission recommendations

Sixth National Pay commission

The sixth National Pay Commission, headed by the then Prime Minister Manmohan Singh, approved the recommendations made regarding hike in salaries on 14 August 2008. However, the 20% hike recommended by the NPC was doubled at the time of implementation during the same year.

About7th Pay Commission

On 24 February 2014, the Government of India issued a Gazette notification which announced the foundation of the 7th Central Pay Commission.

The 7th Pay Commission was formed under the chairmanship of Justice A.K.Mathur with members - Vivek Rae, Dr. Rathin Roy and Meena Agarwal - joining as secretary.

The 7th Pay Commission was expected to submit recommendations within 18 months of its formation.

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New Pay StructureTransparency in the new Pay Structure

In an attempt to bring transparency in the pay structure, while keeping in mind the fallout of the Grade Pay Structure, the 7th Pay Commission has recommended to replace the existing system of pay bands and grade pay with a new pay matrix.

The status of a government employee would now depend on his level in the pay matrix.

Effects on the economyHow would the 7th Pay Commission affect the economy?

The implementation of the 7th Pay Commission is expected to boost the demand of consumption and in-turn growth in market.

The possibility of an increase in general expenditure of the government would result in pushing the inflation further up.

Also, there are high probabilities of the fiscal deficit bearing the brunt of the hike in salaries of the government employees.

One Rank One Pension

The 7th Pay Commission has recommended a revised pension formulation for civil employees, including CAPF personnel and Defence personnel, who have retired before 1 January 2016. The revision would bring out equality between the previous and the current pensioners in the pay scale during retirement.

ImplementationsRecommendations of the Pay Commission

The 7th NPC has recommended a hike of 23.55% in salaries, allowances and pensions of the government employees.

The panel has recommended 14.27% increment in basic pay, the lowest in 70 years.

While the lowest salary paid is settled at Rs 18,000/month, the maximum pay is set at Rs 2,25,000/month.

An overall expenditure of Rs 73,650 crores would be made by the general budget.

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29 Jun 20167th Pay Commission recommendations approved by the Cabinet

01 Jul 2016Protests against 7th Pay Commission gathers momentum

Several central government staff workers and workers' unions have called for a country-wide government employee strike on 11 July.

The Congress has expressed their support to the striking groups calling the changes in the 7th Pay Commission, the "worst in history," saying central government employees were "frustrated and disappointed."

The RSS-affiliated Bhartiya Mazdoor Sangh has also called for a nation-wide strike on 8 July.

03 Jul 2016Centre considering changes to minimum pay after strike threat

In light of the recent calls for strike on 11 July by various Central government staff unions, the government is considering raising the minimum wage to 20,000.

However, unions are adamant that the minimum wage be increased to 26,000, something the Centre says is not feasible.

Unions stated that they would not call off the strike until the government issues a formal notice.

07 Jul 2016Unions defer proposed 11 July strike

After the government agreed to set up a high level committee to look into employee grievances, central government employee unions, deferred their proposed 11 July strike by 4 months.

Leaders of the unions met Home Minister Rajnath Singh and demanded that more changes be made to the 7th Pay Commission.

Government officials said the matter would be resolved shortly.