7th Pay Commission recommends 23.5% Salary hike

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New Delhi Nov 20: Keeping the fiscal math in mind the  Seventh Pay Commission led by Justice AK Mathur has  submitted its report  to the Central government, recommending a modest 16 percent hike in salary but a 63% increase in allowances and 24 percent hike in pensions. This means the overall hike for central government employees and its pensioners comes to 23.5 percent.

This compares poorly with the 35 percent hike after the recommendations of the 6th Pay Commission were implemented.

The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000. For the Secretaries it has been fixed at Rs 2.25 lakh as against Rs 80,000 currently.

Finance Minister Arun Jaitley said after accepting the commission’s report that an additional Rs 70,000 crore would have to be spent by the exchequer in the first year of the implementation of the commission’s recommendations.

Total financial impact in Fiscal Year 17 likely to be about Rs 1.02 lakh crore of which increase in salary would account for Rs 39,100 crore, allowances Rs 29,300 crore and pension at Rs 33,700 crore.ew Delhi on 19 November 2015. Image courtesy PIB

Here are some important takeaways from the 7th Pay Commission recommendations:

  • Recommended date of implementation is 1 January 2016. Minimum pay set at Rs 18,000 and maximum at Rs 2.25 lakh with the cabinet secretary’s emolument at Rs 2.5 lakh per month.
  • Rate of annual increment retained at 3 percent.
  • The recommendations of the commission will impact 47 lakh serving Central government employees and 54 lakh pensioners.

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