7th Pay Commission Of India: What Is It All About? What Are Its Significance?

7th Pay Commission Of India: What Is It All About? What Are Its Significance?

7th Pay Commission Of India: The First Pay Commission of India was established in January 1946. It was under the chairmanship of the Srinivas Varadachariar. The composition of this Pay Commission lies under the Department of Expenditure(Ministry of Finance). Pay Commission is totally set to check for the work and pay the structures of all the civil and military divisions of the Indian government. The government of the respective states is also ready to implement the recommendation for their respective states.

Significance Of Pay Commission?

This is known to us already that over the years the price of a commodity might get increase due to the increase in the cost of productions. Because of such higher rates of inflation, the purchasing power of the money goes on decreasing and thus eventually the fixed salary from the central and state government becomes insufficient to fulfill the basic needs of the employee. The situations are such that if these conditions persist for a longer period then either people will go on to strike or make use of the corrupt practices. Hence to make up the needs of the employees every 10 years the Pay Commission is set up. Till date 7 Pay Commissions are already setup.

7th Pay Commission Of India

Composition of the 7th Pay Commission

This time the composition of the 7th Pay Commission was done on 23rd September 2013 which was under the chairmanship of the Justice A.K. Singh Mathur. While the recommendations of the  Seventh Pay Commission were implemented since January 1, 2016.

Financial Implications of the 7th Pay Commission

As far as the total financial impact is concerned then it amounts to Rs 1,02,100 crore in the FY 2016-17. Out of this amount, the increment in the pay will be around Rs 39,100 crore, an increase in the allowances would be Rs.29,300 crore while on the other hand, the increment in pension would be Rs.33,700 crore.  It is quite worthy to mention that out of this total amount of Rs.28,450 crore will be borne by the railway budget and Rs 73,650 crore by the General Budget.

If we talk about things in the percentage then total increment in the allowance and pay will be 23.55 %. Out of this the increase in pay is 16% and an increase in pension will be 24% and the increase in allowance will be 63%.

7th pay commission

Several Important Facts About Pay Commission

  • Minimum Pay

In the government service, the minimum pay of any employee should be at least Rs.18000 per month. According to the Aykroyd formula, the 7th pay commission will be the last pay commission after which the eighth pay commission will not be set in the country. The head of this 7th pay commission is saying that if we consider the data which is available on the basis of the value index the government should review the central government employees every year.

  • Maximum Pay

Rs.2.25 lac per month for the Apex Scale and Rs.2.5 lac per month for the cabinet secretary and others are present at the same pay level.

  • House Rent Allowance

The Commission is recommending that HRA be paid at the rate of 24%,16%and 8% of the new basic pay for class X, Y and Z cities respectively. The Commission also recommends that the rate of HRA will be revised to 27%,18% and 9% when DA crosses 50 percent.

  • Regarding Pension

The Pay Commission has already recommended another pension formula for civil employees which includes CAPF personnel as well as for Defense Personnel.

  • Regarding Gratuity

There is an enhancement in the ceiling of gratuity which is from the existing Rs.10lakhs to a number of Rs.20lakhs.

  •  Giving Martyr Status for Central Armed Police Forces Personnel

The pay commission as that if a CAPF personnel died on duty then he will be given a status of martyr. The minimum salary of the employees working in the defense personnel was Rs 35, which eventually was increased to Rs 80 after the second Pay Commission. It was then Rs 185 after the third commission and was finally increased to Rs. 18000 after the seventh Pay Commission.

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