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How Much Your Salary Increases in the 7th Pay Commission

How Much Your Salary Increases in the 7th Pay Commission

In mid-2016, the Indian Central government accepted the 7th Pay Commission, according to which pensions and salaries will be increased significantly. Around 10 million central government pensioners and employees are getting increased benefits from August 2016 onwards. Any arrears from January 2016 are announced to be paid by the end of March 2017. Now that the 7th Pay Commission has been accepted, central government employees are curious to know how much more they will get from now on. Read this oneHOWTO article to know how much your salary increases in the 7th pay commission.

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Know a little about 7th Pay Commission

The UPA government formed this pay commission in 2014 under the leadership of Justice A.K. Mathur. Other members included Rathin Roy, the economist, and Vivek Rae, a retired IAS officer from the 1978 batch. Secretary of the Commission is Meena Agarwal. After acceptance of the commission, the recommendations are expected to take effect from 1st January 2016. Pay Commission is constituted by the government after every 10 years, with an aim to revise the salaries of its employees. Most of the time, states easily adopt the new commission after a few modifications. There are around 55 lakh pensioners and 48 lakh employees of the central government who will get benefits from this 7th Pay Commission.

Salary increments in the 7th Pay Commission

The 7th Pay Commission recommends a 23.55% increase in the salary and allowances of central government employees. After acceptance, salaries will be increased by around 16%, and allowances will be hiked by as much as 63%. Pensions will be increased by around 24%. Now, minimum basic salary of a central government employee will be 18,000 rupees and the cabinet secretary, who is the senior most employee of the central government will earn 2.25 lakh rupees per month. An annual increment of 3% is also recommended by the 7th Pay Commission.

Effect on the economy

According to the report of the Pay Commission, the increments will affect the economy by as much as 1.02 trillion rupees. There will be a pay increase of 39,100 crore rupees, and an increase in the allowances of 29,300 crore. Pensions will be increased by 33,700 crore rupees.

Other important points

  • There will be two dates of these increments taking effect, one in January and one in July, provided that the employees are entitled to only one increment a year on either of these dates, depending on his or her date of appointment, financial gradation or promotion.
  • There will be interest free medical treatment advances, travel allowances for a deceased’s family, travel leave concession and traveling allowance for tour and transfer.
  • There will be no change in the rate of monthly contributions towards the group insurance scheme of government employees.
  • A customized scheme of group insurance will be worked out for central government employees.
  • There will be no annual increment for employees who do not give an optimal performance at their job.

The history of Pay Commissions

The first Pay Commission was introduced in 1946, with minimum basic salary decided at 35 rupees. The Second Pay Commission came in 1959 with a basic salary fixed at 80 rupees. Third Pay Commission came in 1973, fourth one came in 1986, fifth in 1996, sixth in 2006 and now the 7th arrived in 2016. The 7th Pay Commission has increased the minimum basic salary from 6,600 rupees to 18,000 rupees, which is a massive increment for central government employees.

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