The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the implementation of the recommendations of 7 th Central Pay Commission (CPC) on pay and pensionary benefits. It will come into effect from 01.01.2016.-inf by Ashok Hindocha M-94262 54999
29-June-2016 18:49 IST
Press Information Bureau
Government of India
Cabinet approves Implementation of the recommendations of 7th Central Pay Commission
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the implementation
of the recommendations of 7
Central Pay Commission (CPC) on pay and pensionary benefits. It will
come into effect from 01.01.2016.
In the past, the employees had to wait for 19 months for the implementation of the Commission’s
recommendations at the time of 5
CPC, and for 32 months at the time of implementation of 6
However, this time, 7
CPC recommendations are being implemented within 6 months from the due
The Cabinet has also decided that arrears of pay and pensionary benefits will be paid during the
current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next
The recommendations will benefit over 1 crore employees. This includes over 47 lakh central
government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are
from the defence forces.
The present system of Pay Bands and Grade Pay has been dispensed with and a new Pay Matrix
as recommended by the Commission has been approved. The status of the employee, hitherto
determined by grade pay, will now be determined by the level in the Pay Matrix. Separate Pay
Matrices have been drawn up for Civilians, Defence Personnel and for Military Nursing Service.
The principle and rationale behind these matrices are the same.
All existing levels have been subsumed in the new structure; no new levels have been introduced
nor has any level been dispensed with. Index of Rationalisation has been approved for arriving at
minimum pay in each Level of the Pay Matrix depending upon the increasing role, responsibility
and accountability at each step in the hierarchy.
The minimum pay has been increased from Rs. 7000 to 18000 p.m. Starting salary of a newly
recruited employee at lowest level will now be Rs. 18000 whereas for a freshly recruited Class I
officer, it will be Rs. 56100. This reflects a compression ratio of 1:3.12 signifying that pay of a
Class I officer on direct recruitment will be three times the pay of an entrant at lowest level.
For the purpose of revision of pay and pension, a fitment factor of 2.57 will be applied across all
Levels in the Pay Matrices. After taking into account the DA at prevailing rate, the salary/pension
of all government employees/pensioners will be raised by at least 14.29 % as on 01.01.2016.
Rate of increment has been retained at 3 %. This will benefit the employees in future
on account of
higher basic pay as
the annual increments that they earn in future will be 2.57 times than at
The Cabinet approved further improvements in the Defence Pay Matrix by enhancing Index of
Rationalisation for Level 13A (Brigadier) and providing for additional stages in Level 12A
(Lieutenant Colonel), 13 (Colonel) and 13A (Brigadier) in order to bring parity with Combined
Armed Police Forces (CAPF) counterparts at the maximum of the respective Levels.
Some other decisions impacting the employees including Defence & Combined Armed Police
Forces (CAPF) personnel include :
Cabinet approves Implementation of the recommendations of 7th Central...
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Gratuity ceiling enhanced from Rs. 10 to 20 lakh. The ceiling on gratuity will increase by 25 %
whenever DA rises by 50 %.
A common regime for payment of Ex-gratia lump sum compensation for civil and defence forces
personnel payable to Next of Kin with the existing rates enhanced from Rs. 10-20 lakh to 25-45
lakh for different categories.
Rates of Military Service Pay revised from Rs. 1000, 2000, 4200 & 6000 to 3600, 5200, 10800 &
15500 respectively for various categories of Defence Forces personnel.
Terminal gratuity equivalent of 10.5 months of reckonable emoluments for Short Service
Commissioned Officers who will be allowed to exit Armed Forces any time between 7 and 10
years of service.
Hospital Leave, Special Disability Leave and Sick Leave subsumed into a composite new Leave
named ‘Work Related Illness and Injury Leave’ (WRIIL). Full pay and allowances will be granted
to all employees during the entire period of hospitalization on account of WRIIL.
The Cabinet also approved the recommendation of the Commission to enhance the ceiling of
House Building Advance from Rs. 7.50 lakh to 25 lakh. In order to ensure that no hardship is
caused to employees, four interest free advances namely Advances for Medical Treatment, TA on
tour/transfer, TA for family of deceased employees and LTC have been retained. All other interest
free advances have been abolished.
The Cabinet also decided not to accept the steep hike in monthly contribution towards Central
Government Employees Group Insurance Scheme (CGEGIS) recommended by the Commission.
The existing rates of monthly contribution will continue. This will increase the take home salary of
employees at lower levels by Rs. 1470. However, considering the need for social security of
employees, the Cabinet has asked Ministry of Finance to work out a customized group insurance
scheme for Central Government Employees with low premium and high risk cover.
The general recommendations of the Commission on pension and related benefits have been
approved by the Cabinet. Both the options recommended by the Commission as regards pension
revision have been accepted subject to feasibility of their implementation. Revision of pension
using the second option based on fitment factor of 2.57 shall be implemented immediately. A
Committee is being constituted to address the implementation issues anticipated in the first
formulation. The first formulation may be made applicable if its implementation is found feasible
after examination by proposed Committee which is to submit its Report within 4 months.
The Commission examined a total of 196 existing Allowances and, by way of rationalization,
recommended abolition of 51 Allowances and subsuming of 37 Allowances. Given the significant
changes in the existing provisions for Allowances which may have wide ranging implications, the
Cabinet decided to constitute a Committee headed by Finance Secretary for further examination
of the recommendations of 7th CPC on Allowances. The Committee will complete its work in a
time bound manner and submit its reports within a period of 4 months. Till a final decision, all
existing Allowances will continue to be paid at the existing rates.
The Cabinet also decided to constitute two separate Committees (i) to suggest measures for
streamlining the implementation of National Pension System (NPS) and (ii) to look into anomalies
likely to arise out of implementation of the Commission’s Report.
Apart from the pay, pension and other recommendations approved by the Cabinet, it was decided
that the concerned Ministries may examine the issues that are administrative in nature, individual
post/ cadre specific and issues in which the Commission has not been able to arrive at a
As estimated by the 7th CPC, the additional financial impact on account of implementation of all its
recommendations in 2016-17 will be Rs. 1,02,100 crore. There will be an additional implication of
Rs. 12,133 crore on account of payments of arrears of pay and pension for two months of
Cabinet approves Implementation of the recommendations of 7th Central...
BSNL Forum of Unions coming ahead in part of BSNL Revamp
the past, the image of unions, that it only asks about the salaries and
benefits. As on date, this is changed, when it comes to BSNL Unions, it
is against that. BSNL Forum of Unions had gone to strike to procure new
equipment’s and many more for expansion of BSNL, its already proved
with recent two days strike on 21st and 22nd April, 2015 in terms of
100% participation by the BSNL employees.
are working to revive BSNL, furthermore, unions are taking their part to
drive the newly launched plans to attract more new customers, Here the
one big thing is, Free night calling facility is not available for BSNL
Employee Landline Phones, BSNL unions also are not asking for that,
Rather they are promoting these plans which can aid for BSNL revenue.
BSNL unions are also coming out of the retro union mind-set.
Forum decided to popularize the night free call facility in Landline
Services and All India Free roaming in Mobile connections implemented by
BSNL among the public with two major offers, which are having the
potential to generate huge revenue in future and to and to offer best
BSNL Telecom Services.
BSNL Forum has also urged their employees like this, Now
it’s the time for all our comrades to go all out and utilise this
golden opportunity and to add more and more customers to restore the
previous glory of BSNL.
BSNL Forums has decided to
popularize the newly introduced schemes among public and to take maximum
efforts to increase landline connections and improve the Quality of
Service and Customer Service, and conducting a month campaign from
08.06.2015 to 07.07.2015 to popularize the newly introduced schemes of
BSNL with all their employees and to maintain the network with special
BSNL Forum instructed all their BSNL Service
area level Forum heads also to chalk out their action plans about to
conduct the roadshows, melas or any channel involving maximum BSNL
Employees for adding the new customers into BSNL and approaching old
BSNL customers personally or through a contact number for availing
Telephone / Broadband re-connection, whose BSNL services disconnected in
the recent past, and to give vide Publicity through advertisements via
Local / Regional / National News Papers, and display of Flex Boards,
BSNL Forum extending the urge of their
employees with another word i.e We have to put our Special efforts to
make Landline Fault Free. BSNL Forum has strongly decides and explained
to their employees i.e. If these issues(regarding material /equipment to
provide quality of services to customer) at Service areas were not
settled for making good customer relation with fault free services, it
should be brought to the notice of the Forum Leaders too at any time to
inform to BSNL Corporate Office.
BSNL Free Night
Calling is not available for BSNL Employees, and this is also not
demanding by any BSNL Union, but popularizing the plan, an Appreciating
Issue for all BSNL Employees. BSNL Forum has explained all the
following offers (about latest introduced plan and tariffs) in the way
of conducting meetings with their employees to guide the customer
clearly in any manner.
BSNL Forum has strongly decide that Open Mouth Marketing is the
best source to reach every customer from employee side. So BSNL Unions
are doing their best to make BSNL a profit making company in near future
with Good Quality of services to reach to every customer at every nook
and corner to feel great with BSNL. With all these steps, BSNL Forum of Unions are excused from monotonous Union Mindset and to be a part of BSNL Revamp.
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