What You Get in 7th Pay Commission ?

7th Pay commission draft is forwarded to cabinet and government may announce the recommendation of 7th Pay commission any time now. If your are a central government employee, here is everything you need to know about the proposed recommendations in the 7th Pay Commission.

The recommendation of Pay commission will hike the salary including the Pay scale and allowances. Pensioners also get benefited with the implementation of 7th CPC.

Click to Read : 7th Pay Commission To Be Recommended Today,Calculate Your Salary

Here are the highlights of 7th Pay commission

  1.  Date of implementation : The committee has recommended date of implementation for 7th CPC January 1, 2016. Arrears will be paid since January this year.

    Minimum Pay : As per Aykroyd formula, the minimum pay in government sector job is recommended to be set at Rs 18,000 per month, although the secretary level recommendation are for Rs 23000/-


    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, although the secretary level recommendation are for Rs 3.25 lacs per month.

  4. What is the New Pay Structure?

    7th Pay commission has abolished the concept of Grade pay system. The present system of pay bands and grade pay has been dispensed with new terminology i.e. Pay Matrix. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix.


    A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.

    Annual Increment

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

    Modified Assured Career Progression (MACP) or Appraisal

    * Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”.

    * The Commission has also proposed that annual increments not be granted in the case of those employees who are not able to meet the benchmark either for MACP or for a regular promotion in the first 20 years of their service.

    * No other changes in MACP recommended.

  5.  Allowances

    The 7th Pay Commission has recommended abolishing 52 allowances altogether. Rest of the 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.

    Risk and Hardship Allowance: Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance.

  6. House Rent Allowance

    With the increase of Basic Pay ,the 7th Pay Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 per cent of the new Basic Pay for Class X, Y and Z cities respectively. The Commission also recommends that the rate of HRA will be revised to 27 per cent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 per cent and 10 per cent when DA crosses 100 per cent.

    In the case of PBORs of Defence, CAPFs and Indian Coast Guard compensation for housing is presently limited to the authorised married establishment hence many users are being deprived. The HRA coverage has now been expanded to cover all.

    Any allowance not mentioned in the report shall cease to exist. Emphasis has also been placed on simplifying the process of claiming allowances.

    Advances: a. All non-interest bearing Advances have been abolished. b. Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to Rs 25 lakh from the present Rs 7.5 lakh.

    Central Government Employees Group Insurance Scheme (CGEGIS): The Rates of contribution as also the insurance coverage under the CGEGIS have remained unchanged for long. They have now been enhanced suitably.

  7. Medical Facilities

    Introduction of a Health Insurance Scheme for Central Government employees and pensioners has been recommended. All postal pensioners should be covered under CGHS. All postal dispensaries should be merged with CGHS.


    The Commission recommends a revised pension formulation for civil employees including CAPF personnel as well as for Defence personnel, who have retired before 01.01.2016. This formulation will bring about similarity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.

    The past pensioners shall first be fixed in the Pay Matrix being recommended by the Commission on the basis of Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the pay matrix.

    This amount shall be raised to arrive at the notional pay of retirees, by adding number of increments he/she had earned in that level while in service at the rate of 3 percent. In the case of defence forces personnel this amount will include Military Service Pay as admissible.

    Fifty percent of the total amount so arrived at shall be the new pension. An alternative calculation will be carried out, which will be a multiple of 2.57 times of the current basic pension.

    The pensioner will get the higher of the two.


    Gratuity have been enhanced from the existing Rs 10 lakh to Rs 20 lakh. The ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent.

     Disability Pension for Armed Forces

    The Commission is recommending reverting to a slab based system for disability element, instead of existing percentile based disability pension regime.

    Ex-gratia lump sum compensation to next of kin

    The Commission is recommending the revision of rates of lump sum compensation for next of kin (NOK) in case of death arising in various circumstances relating to performance of duties, to be applied uniformly for the defence forces personnel and civilians including CAPF personnel.

  8. Peperformance related Pay

    The Commission has recommended introduction of the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents, reformed Annual Performance Appraisal Reports and some other broad Guidelines. The Commission has also recommended that the PRP should subsume the existing Bonus schemes.

Click Here :  7th Pay Commission Salary Calculator

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