7th Pay Commission Latest News – Increase in Basic Pay meagre but expected gains out of other compensation, a solace

7th Pay Commission Latest News – Increase in Basic Pay meagre but expected gains out of other compensation, a solace

Here are some areas of 7th Pay Commission report which are much beneficial to Central Government Employees. If Govt accepts these recommendations as such overall compensation package of Central Government Employees will be more attractive.

7th Pay Commission Latest News – Increase in Basic pay of 14.22% which is lowest increase out of any Pay Commission – However, certain Positive Aspects of Recommendations made in the 7th CPC Report mainly in the areas of Central Government Employees Welfare measures and Retirement Schemes may be solace to Central Government Employees

After a long wait of 10 years, Basic Pay of Central Government Employees has been proposed for an increase of 14.22%. In any standards, this quantum of increase can not be justified to be adequate. In fact this is the lowest increase out of any pay commission constituted in India so far. Let’s wait and see whether Empowered Committee formed by the Govt to process the present pay commission report make any positive changes to it.

Though 7th Pay Commission report failed to convince Central Government Employees in pay and allowances front, there are certain positive aspects in the recommendations which mainly relate to welfare measures, compensation and Retirement benefits. In the following paragraphs we would be discussing those which might surely improve overall Compensation package of central government employees in the long run.

7th Pay Commission’s decision to retain CPI-IW with base Year 2001=100 for determining Dear Allowance rate:

As demanded by various Central Government Employees Federations 7th CPC has proposed for retaining All India Consumer Price Index (Industrial Workers) with base year 2001=100. This means the allowance offered by govt to compensate inflation would continue to be calculated in the same as it is done presently, after deducting the quantum of DA (@ 125% for 126%) that is to be merged with pre-revised pay.

Dearness Allowance with effect from 1st January 2016 =[ (Avg of AICPI for the period from January 2015 to December 2015 – 115.76)*100/115.76] – 125 (or) 126

Interestingly, the earlier Pay Commission (6CPC) had proposed for adopting to new series of index (CPI-IW with base year 2001=100) which was later accepted by Govt. This measure needed adjustment in the calculation formula in respect of dearness allowance with effect from 1st January 2006 in the form of linking factor of 4.63 between base year 1982=100 and 2001=100

7th Pay Commission as well as Govt could justify in retaining CPI-IW with base year 2001=100 as new series of the index with base year 2015=100 is yet to be unveiled.

A new series of CPI-IW for DA Calculation means adjustments from old base year to new base year using linking factor and rounding-off which would surely put breaks on higher DA to Central Government Employees. So, 7th Pay Commission’s recommendations on retaining the present series of CPI-IW for DA purpose is welcome one.

Enhanced Central Government Employees General Insurance Scheme Coverage up to Rs. 50 lakh:

7th Pay Commission Recommended Rates of CGEGIS

Increase in Gratuity ceiling to Rs. 20 lakh with DA indexed Gratuity for the first time:

7th Pay Commission proposed that ceiling in respect of Gratuity will have to be increased from the existing ₹10 lakh to ₹20 lakh.

Moreover, for the first time DA indexed Gratuity viz., increase by 25 percent whenever DA rises by 50 percent has been introduced by the Commission. This measure would surely compensate the inflation factor as gratuity of Rs. 20 lakh received by a retiring employee in 2016 will never be equal to the same amount received by another in 2025.

Further, 7th Pay Commission has proposed that 20 times of monthly emoluments is to be paid as gratuity for employees who intend to retire after serving 10 year of service but before 20 years of service. Presently, 10 times of monthly emoluments is being paid for length of service between 10 years to 20 years.
Child Care Leave extended Single Male Central Government Employees also:

Child Care Leave (CCL) is granted to women employees presently for a maximum period of two years (i.e., 730 days) during their entire service for taking care of their minor children (up to eighteen years of age).

In addtion to women employees, 7th CPC has propsed that a male employee who is single, will also be entited to Child Care Leave.

House Building Advance (HBA) – Loan Ceiling increased to Rs. 25 lakh:

As far Housing loan extended by Govt to its employees is concerned the Commission proposes 34 times of Basic Pay or Rs.25 lakh OR anticipated price of house, whichever is least. This is more than three times higher than the present level.

Children Education Allowance and Hostel Subsidy increased by 1.5 times – whenever DA increases by 50%, these two reimbursements will be increased by 25%

7th Pay Commission recommends Higher Grade Pay for certain Posts in Central Government Service considering the service conditions:

On the basis of nature of work and anomalies, 7th Pay Commission has recommended higher grade pay for certain cadres.

Post wise higher grade pay recommended list is given below: