Cabinet clears 7th Pay Commission: 10 important takeaways

The Union cabinet on June 29 cleared the recommendations of the Seventh Central Pay Commission. The significant decision will benefit more than one crore government employees and pensioners.

The pay commission had recommended a 14.27 per cent hike in basic pay - the lowest in 70 years. The previous Sixth Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.

The Gazette notification of appointment of Seventh Pay Commission was published by the Congress-led UPA government of Manmohan Singh on February 28, 2014, a couple of months before the last Lok Sabha elections. The panel has given its report in just over two years.

It is the next big announcement of Modi government, the earlier one being the implementation of the One Rank, One Pension (OROP) scheme. This comes months before the crucial Assembly elections next year, including those in the most populous state of Uttar Pradesh. The BJP may hope to reap the benefits of both, OROP and pay panel recommendations.

These are the 10 significant points related to the recommendations of the 7th Central Pay Commission:

1. The recommendations will result in a hike in salaries of nearly 50 lakh central government employees and payouts of 58 lakh pensioners.

2. The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years.

3. The commission has recommended a minimum pay of Rs 18,000 per month, fixed an upper ceiling at Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others at present at the same pay level.

4. The date of implementation for the recommendations is January 1, 2016.

5. The previous Sixth Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.

6. After considering the increase proposed in allowances, the hike in remunerations comes to nearly 24 per cent.

7. While the Budget for 2016-17 did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.

8. A secretaries' panel, headed Cabinet secretary PK Sinha, has already vetted the Seventh Pay Commission recommendation.

9. The total financial impact of implementing the pay commission recommendations in the 2016-17 fiscal is likely to be Rs 1,02,100 crore, as per government estimates.

10. The pay panel also recommended 'one rank one pension' kind of set-up for the central government's all civil employees, Central Armed Police Forces as well as defence personnel to bring "parity between past pensioners and current retirees with the same length of service" who retired before January 1, 2016.