Jul 26, 2016

Seventh Pay Commission Hike Notified: 10 Things To Know

The Finance Ministry has notified the salary hike based on Seventh Pay Commission recommendations. This means that lakhs of government employees will receive higher salaries likely from next month. The notification is dated July 25, 2016. About 1 crore employees and pensioners will benefit from the pay hike, effective from January 1, 2016. 

Here are the key highlights of the notification: 

1) According to the pay new structure, the existing basic pay as on December 31, 2015, shall be multiplied by a factor of 2.57.

2) The arrears shall be paid during the financial year 2016-2017. 

3) Entry-level pay will be raised to Rs 18,000 a month from the current Rs 7,000. The maximum pay has been fixed at Rs 2.5 lakh. 

4) The Seventh Pay Commission's recommendations on allowances (except dearness allowance) has been referred to a committee, which will submit its report within four months. All allowances will continue to be paid at existing rates in existing pay structure. 

5) There shall be two dates for grant of increment January 1 and July 1 of every year, instead of existing date of July 1.

6) The recommendations of the Commission for increase in rates of monthly contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) for various categories of employees has not been accepted. The existing rates of monthly contribution shall continue.

7) The Finance Ministry will work out a customised group insurance scheme for central government employees.

8) The recommendations of the seventh pay commission relating to interest bearing advances as well as interest free advances have been accepted with some exceptions. 

9) Committees will be set up by Department of Personnel to examine individual, post-specific and cadre-specific anomalies arising out of implementation of the recommendations of the Commission.

10) A committee will be set up to suggest measures for streamlining the implementation of the National Pension System (NPS).