The Narendra Modi government sanctioned the 7th Pay Commission in June 2016, while the Commission was set up in September 2013. However, six months since the sanction, the employees of the Indian government have yet to receive the hike from the government. The delay in the 7th Central Pay Commission (7CPC) has been blamed on currency demonetisation in November 2016. The National Democratic Alliance or NDA government revealed that there is a cash crunch due to which the 7th Pay Commission allowances of 47 lakh employees and 53 lakh pensioners have been kept on hold. The number of beneficiaries includes 14 lakh employees and 18 lakh pensioners from the armed forces.
There are various benefits of the 7th Pay Commission, which will increase the income of around one crore government officers and pensioners. The Seventh Pay Commission has also recommended two dates for annual increments, and the introduction of the Performance Related Pay (PRP) for all central government employees. Here are 7 highlights of the 7th Pay Commission so far.
1. 7th Central Pay Commission Proposal
The proposal for 7th Pay Commission, which gives a hefty increment to government officials, was put forward in November 2015 to the NDA government. The Narendra Modi government accepted the recommendations of 7CPC after severe analysis in June 2016. The recommendations of the 7th Pay Commission give a 14% hike in salary to government officials. Union Finance Minister Arun Jaitley stated this to be a historical increase in salaries.
2. Cost of 7th Pay Commission to the government
While the rules and recommendations for the 7th Pay Commission have been in place, the government is yet to implement its commission, which will benefit many government officials and pensioners including the Indian armed forces. Apart from demonetisation, the main reason behind this delay is the high value of investment required. According to reports, the 7th Pay Commission recommendations would have cost Rs 1.02 lakh crore in Fiscal Year 2016-17 to the government.
3. Actual hike in 7th Pay Commission
The 7th Pay Commission will revise the minimum salary of a central government employee from the current Rs 7,000 per month to Rs 18,000 per month. The salary of cabinet secretaries will be increased up to a minimum of Rs 2.5 lakh per month against the current salary of Rs 90,000. The gratuity ceiling has been increased from Rs 10 lakh to Rs 20 lakh.
4. Increment pattern in 7th Pay Commission
While this initial increment in the 7th Pay Commission is high and doubles the income of the government officials, the increment structure proposed is a boon to employees as well, although it will increase costs for the government. Previously, the increment process for government employees was done on July 1 each year. Now, the notification of the 7th Pay Commission has given two dates for grant of increment – January 1 and July 1 of every year. Although each employee is entitled to one annual increment, the change in dates is to help in the flexibility based on the date of appointment of each employee. The 7CPC has recommended the Performance Related Pay (PRP), to be based on Results Framework Documents (RFD) and reformed Annual Performance Appraisal Reports.
5. Increase in spending power
Once in action, the 7th Pay Commission will bring a 23.5% increase in the income of the central government employees and pensioners. This will contribute to the increased standard of living of government employees and help in raising their spending capacity. The increment is being watched by various industries, as economists predict that this raise in salaries will push the consumer demand in various sectors like consumer durables, realty, etc.
6. Support from state governments for 7th Pay Commission
Despite the huge costs of the 7th Pay Commission, various states have shown their support for its implementation. The Jammu and Kashmir government has announced that the recommendations of the 7th Pay Commission will be implemented from April 2018. Uttarakhand and Uttar Pradesh have implemented the recommendations from January 1, 2017, and Goa from January 4. Haryana also announced its support for the scheme, with Chief Minister Manohar Lal Khattar stating that the 7th Pay Commission would be implemented in 2017 in his state.
7. The 7th Pay Commission and the Defence Forces
The Seventh Pay Commission has received negative reactions from the Indian defence. While 7th Central Pay Commission provides for mandated timescale promotions from the police, the Defence civilians from audit and account services, and other officers at regular intervals of 4, 9, 13, 14, and 16 years of service, it does not do the same for armed forces officers. According to the Ministry of Defence orders, a police officer and Defence Accounts Officer with 14 years’ service will be at a higher level than the naval officer in command of INS Vikramaditya, India’s aircraft carrier. Such anomalies caused distress for the army officers who have been vocal of their opinions on social media.
In the Union Budget 2017 that will be presented on February 1, 2017, Finance Minister Arun Jaitley may announce a hike in or some changes in the 7th Pay Commission. Hopefully, it will be implemented soon, too. Edited by Shweta Parande.