7th Pay Commission Recommendations – Salient Features at the first look of the 7th CPC report to the Central Govt employees

1. Minimum Pay
Minimum Pay which was Rs. 7000 in the 6th Pay Commission has been fixed now at Rs. 18,000/-. A Multiplication factor of 2.57 has been used in arriving at this minimum pay.
2.Maximum Pay:
Maximum Pay of 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.
3. Fitment Formula:
7th Pay Commission has formulated fitment formula as far as existing employees are concerned as 2.57. For instance, 7CPC pay of the employees who are presently in the pay band of 5200 – 20200 with grade pay of Rs. 1800, will be calculated by multiplying the factor of 2.57 with their existing basic pay (pay in pay band + grade pay)
4. Date of Effect of 7th Pay Commission Pay:
7th pay Commission pay will be effective from 1st January 2016.
5. Annual Increment:
7th Pay Commission has recommended for Uniform Annual Increment of 3%
6. Modified Assured Career Progression (MACP):
Existing Performance benchmarks for MACP is “Good”. 7th Pay Commission proposes that it should be “Very Good”. 10 years, 20 years and 30 years Slab continues.
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.
7. Allowances:
The Commission has recommended abolishing 52 allowances altogether. Another 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.
8. House Rent Allowance:
Population of
Class of
HRA rates as % of Basic Pay
(including MSP and NPA)
  50 lakh and above
  50–5 lakh
  Below 5 lakh
Transport Allowance:
Pay Level
Higher TPTA Cities
Other Places
      9 and above
3 to 8
1 and 2
9. Advances:
All non-interest bearing Advances have been abolished.
Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to ₹25 lakhs from the present ₹7.5 lakhs.
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. The following rates of CGEGIS are recommended:
Pay level
Present Insurance
Proposed Insurance
Present Monthly Deduction
Proposed Monthly Deduction
10 and above
6 to 9
1 to 5

10. Health Insurance Scheme
The  Commission  strongly  recommends  the  introduction  of  health  insurance scheme for Central Government employees and pensioners. In the interregnum, for the benefit of pensioners residing outside the CGHS areas, the Commission recommends that CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. This would involve strengthening of administrative capacity of nearest CGHS centres. However, this step will go a long way in ameliorating the pending grievances of these pensioners.
The Commission recommends that the remaining 33 postal dispensaries should be merged with CGHS. The Commission further recommends that all postal pensioners, irrespective of their participation in CGHS while in service, should be covered under CGHS after making requisite subscription.
11. Gratuity
7th Pay Commission has proposed for Enhancement in the ceiling of gratuity from the existing Rs.10 lakh to Rs. 20 lakh. The Commission has also recommended that the ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent.
12. NPS:
7th Pay Commission has recommended for improving the present National Pension System in view of many grievances reported.
13. Leave:
Casual Leave : No Change recommended
Chile adoption Leave : No Change
Child Care Leave: Commission recommends that CCL should be granted at 100% of salary for first 365 days but at 80% for next 365 days. The Commission has also recommended for granting Child Care Leave Single Male Parents
Commuted Leave: No Change
Earned Leave : No Change with respect to encashment
Leave No due : No Change
Paternity Leave : No Change
Study Leave : No Change
14. GPF (General Provident Fund)
Status quo is recommended as far as GPF is concerned
15. Children Education Allowance:
On the whole, the Commission is of the view that quantum of CEA should be calibrated in such a manner that the main objective is met without the government entering into the field of subsidizing private education. Hence, taking into account the various items of expenditure
that are reimbursed as a part of this allowance, the following is recommended:
Recommended rate
  CEA(Children        Education Allowance) (pm)
   1500×1.5 = 2250
Whenever DA increases by 50%, CEA shall increase by 25%
Hostel Subsidy (pm)
     4500 x 1.5 =
   6750 (ceiling)
Whenever DA increases by 50%, Hostel
Subsidy shall increase by 25%
The allowance will continue to be double for differently abled children.
Also, the extension of scope of the allowance beyond Class XII was not accepted by 7th Pay Commission

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