The latest news on the 7th Pay Commission is that the Central Government is expected to announce a new dearness allowance (DA) rate for central government employees in October 2023. The current DA rate is 42%, and it is expected to be increased to 46%. This would mean a salary increase of around 4% for central government employees.
The 7th Pay Commission was constituted in 2014 to make recommendations on the revision of pay and allowances of central government employees. The Commission submitted its report in 2015, and the government accepted its recommendations in 2016. The 7th Pay Commission recommendations were implemented in January 2016.
The DA is a component of the salary of central government employees that is revised twice a year, in January and July, to keep up with the rise in inflation. The DA is calculated as a percentage of the basic pay of the employee.
The increase in the DA rate is expected to benefit over 48 lakh central government employees and 65 lakh pensioners. The government is expected to spend around ₹30,000 crore annually on the increased DA.
The Seventh Pay Commission was put into effect in January 2016, and while the latest update is currently in progress, it has faced some delays.
7th Pay Commission Latest News
The most recent update on the 7th Pay Commission reveals an increase in the base salary for central government employees from 34% to 38%. This revised rate came into effect on July 1, 2022, and it pertains to news from the previous year. Additionally, more than 23 lakh retired pensioners stand to benefit with an increase of up to 18,000 under the seventh pay commission, and three pending dearness allowance (DA) instalments will be reinstated starting from July 1, 2021.
The Indian government instituted the Pay Commission to provide recommendations on the remuneration of central government employees and to enhance their allowances and related matters. Since India gained independence, successive Pay Commissions have been set up to review proposed alterations to the salary structure for all civilian and military personnel in the Central government.
7th Pay Commission Overview
| Commission | 7th Pay Commission |
| Year | 2023 |
| Responsible Authority | Central Government |
| Target | To increase Salary and Allowance |
| Date of Constitution | February 28, 2014 |
| Date of Submission of Report | November 19, 2015 |
| Date of Implementation | January 1, 2016 |
| Number of Beneficiaries | Over 50 lakh central government employees and pensioners |
| Key Recommendations | – Increase in basic pay by 23.55% – Introduction of a new pay matrix with 18 pay levels – Increase in allowances, such as dearness allowance, house rent allowance, and travel allowance |
Fitment Factor for the 8th Central Pay Commission
The Fitment Factor is a multiplier used to calculate the new basic pay of central government employees under the 8th Pay Commission. It is calculated by dividing the new basic pay of the lowest-paid employee under the 7th Pay Commission by the new basic pay of the lowest-paid employee under the 8th Pay Commission.
The Fitment Factor for the 8th Pay Commission is 2.57. Under the 8th Pay Commission, central government employees’ new basic pay is 2.57 times higher than in the 7th Pay Commission.
Seventh Central Pay Commission Of India
The Seventh Central Pay Commission (7th CPC) was a commission appointed by the Government of India in February 2014 to review the pay and allowances of central government employees. The commission submitted its report in November 2015, and the government accepted its recommendations in 2016. The 7th CPC recommendations were implemented in January 2016.
The 7th CPC recommendations resulted in a significant increase in the salaries of central government employees. The basic pay was increased by 23.55%, and a new pay matrix with 18 pay levels was introduced. The allowances, such as dearness allowance, house rent allowance, and travel allowance, were also increased.
7th Pay Commission Pay Scale
The announcement of the 7th Pay Commission’s pay scale is expected to occur shortly, as indicated by officials. In January 2019, the government raised the dearness allowance for government employees by 3%, and financial experts are now anticipating a potential increase of up to 5% in the DA. Here are some key highlights from the seventh pay commission, particularly concerning the recommended minimum pay for government employees.
Newly hired government employees at entry level now earn a minimum monthly salary of 18,000, up significantly from 7,000. In line with minimum pay guidelines, a newly appointed Class One officer’s salary has been raised to 56,100 per month, per official sources.
Setup Of 7th Pay Commission
The Seventh Central Pay Commission (7th CPC) was set up by the Government of India on February 28, 2014, to review the pay and allowances of central government employees. The commission was headed by Justice Ashok Kumar Mathur, a retired judge of the Supreme Court of India. The other members of the commission were:
- Dr. Vijay Kelkar, economist
- Vivek Rae, former Finance Secretary, Government of India
- Dr. Rathin Roy, economist
- Meena Agarwal, former Secretary, Department of Personnel and Training, Government of India
- Bimal Jalan, former Governor, Reserve Bank of India
The commission was tasked with the following responsibilities:
- To review the existing structure of pay and allowances of central government employees, including civilian employees, defence personnel, and pensioners.
- To suggest pay and allowance changes, considering factors like living costs, private sector pay, and government finances.
- To make recommendations on other related matters, such as the leave structure, pension scheme, and grievance redressal system.
The commission presented its report to the Government of India on November 19, 2015. In 2016, the government approved and applied the commission’s recommendations, leading to updated pay and allowances starting January 2016.
The 7th CPC marked a substantial overhaul of the pay and allowances structure for central government employees in India. This overhaul brought about a notable increase in the salaries of central government employees and introduced numerous new allowances and benefits. It stands as a significant milestone in the history of central government employment in India, ultimately benefiting the lives of central government employees and pensioners positively.
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