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Live 7th Pay Commission Latest News 2016 Central Govt employees, Pensions, seventh Pay Commission hike government salary, Union Cabinet

Live 7th Pay Commission Latest News 2016 Central Govt employees, Pensions, seventh Pay Commission hike government salary, Union Cabinet

The Union Cabinet on Wednesday approved the recommendations made by the 7th pay commission.

The approval, which will be made public soon, is likely to see a higher increase in the basic pay than the nearly 15 per cent recommended by the 7th Pay Commission for over 1 crore government employees and pensioners.7th pay comm

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. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.



  1. The Pay Commission recommended 23.55 percent overall increase in salaries, allowances and pension.
  2. The panel recommended a 14.27 percent increase in basic pay, the lowest in 70 years
  3. The new allowances and hikes were cleared by the Cabinet today and are based on the recommendations of the Seventh Pay Commission - a government committee reviews the pay of government employees nearly every decade.
  4. Government workers also have been getting half-yearly and annual increments linked to prices. The newrules do away with 52 allowances and merge 36 others.
  5. Under the new scheme, the maximum salary for a government servant will be about 2.5 lakhs a month, that's more than double the top-rung pay of Rs. 90,000 a month.
  6. The minimum pay in government is recommended to be set at Rs 18,000 per month. This is more than double the present Rs 7,000.
  7. Ceiling of gratuity doubled to Rs 20 lakh

  8. The maximum pay is set at Rs 2,25,000 per month for apex scale and Rs 2,50,000 per month for cabinet secretary and others at the same pay level (as against the current Rs 90,000 per month)
  9. The government is counting on the higher salaries to result in more consumer spending which could trigger economic growth.
  10. The 7th Pay Commission report will be effective from January 1
  11. The increase in salaries of government employees is likely to boost consumption by Rs 40,000-50,000 crore and savings by around 30,000 crore. The boost to consumption would add 0.5 percentage points to the GDP.
  12. The hike would mean an additional cost of Rs 1 lakh crore to the government, of which pension payments would account for Rs 33,700 crore.
  13. A part of the additional cost to the government would be compensated by the increased income tax and sales tax following increased consumption.
  14. India Ratings pegs the net impact on the central government finances at Rs 80,600 crore.
  15. The hike in salary may increase inflation. The RBI's current inflation projections did not take into account the impact of salary hike.
  16. The 6th pay commission had recommended a salary hike of 40 per cent in 2008, effective from January 1, 2006.

Who benefits? The new pay rules are expected to benefit 50 lakh government employees and about 58 lakh pensioners. According to media reports, several senior government officials will see a higher salary than some Parliamentarians.

By how much? Salaries and allowances are expected to rise by 23.5 per cent as per the recommendations of the commission. Base pay is expected to rise by 15 per cent.

By when? Changes are expected to be effective January 1, 2016. 

Date of implementation

The recommended date of implementation is January 1, 2016. So, government employees will get arrears from January this year.

Minimum Pay

Based on the Aykroyd formula, the minimum pay in government is recommended to be set at Rs 18,000 per month.

Maximum Pay

Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

Annual Increment

The rate of annual increment is being retained at 3 per cent.

What is Pay Commission?

The Pay Commission is a panel constituted by the Indian government to give recommendations regarding changes in salary structure of government employees.

Formed for the first time in 1946, the government constitutes the Pay Commission almost every 10 years. There have been seven pay commissions till date.

The Commission, consisting of advisers, institutional consultants and various experts, and is headquartered in Delhi. Every time it is constituted, it is given 18 months to make these recommendations.

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