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Friday, July 1, 2016

Cabinet decisions on Implementation of the recommendations of 7th Central Pay Commission

Cabinet decisions on 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 7th 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 5th CPC, and for 32 months at the time of implementation of 6th CPC. However, this time, 7th CPC recommendations are being implemented within 6 months from the due date.

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 financial year.

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.


1.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.

2. 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.

3.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.

4.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. 

5.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 present.

6.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.

7.Some other decisions impacting the employees including Defence & Combined Armed Police Forces (CAPF) personnel include :

  • 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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 consensus.

14. 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 2015-16.

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NJCA has issued a statement on 01.07.2016

NJCA has issued a statement on 01.07.2016

National Joint council of Action
4, State Entry Road New Delhi - 110 055


Dated:July 1, 2016

Dear comrades

We are to inform you that the NJCA has a discussion with the Government of India yesterday, i.e. 30.06.2016 over certain demands contained in our charter of Demands, in the meeting, following ministers were present:-

Shri Rajnath singh, Honble Home Minister
Shri Arun Jaitley, Honble Finance Minister
Shri Suresh Prabhakar Prabhu, Honble Railway Minister
Shri Manoj Sinha, Hon'ble MosR

On behalf of the NJCA, the following participated in the discussion:-

Shri Shiva Gopal Mishra, convener NJCA
Shri M.Raghavaiah, Chairman NJCA
Shri K.K.N.Kutty, Member NJCA
Shri C.Srikumar,Member NJCA

The Government has proposed to refer the issue of Minimum wage and Fitment Formula to a Committee for reconsideration.

The NJCA will await communication in this regard from the government.

The NJCA will again meet on 6th July at 11.00 hrs, in JCM Office, 13-C, Ferozshah Road, New Delhi for taking appropriate decision.

with Fraternal Greetings!

Comradely yours

(Shiva Gopal Mishra)


Charter of Demands, Mainly Minimum wage, multiplier factor, railway specific issues etc - NFIR

Charter of Damands, Mainly Minimum wage, multiplier factor, railway specific issues etc

No.II/95/Part IX

Dated: 30-06-2016
Charter of Demands, Mainly Minimum wage, multiplier factor, railway specific issues etc

Shri Suresh Prabhu
Hon'ble Minister for Railway
Rail Bhavan
New Delhi

Dear Sir,

Sub: Charter of Demands, Mainly Minimum wage, multiplier factor, railway specific issues etc. Serious resentment among railway employees against the Government's decisions - reg.

the presidents and the General secretaries of Federations (AIRF & NFIR) called on you yesterday i.e. 29th June 2016 and conveyed our serious disappointment as well unhappiness among railway employees on the Government's decisions relating to VIIth Central Pay Commission's Recommendations.

We are extremely sad to convey that the Government has not reasonably dealt with our demands mainly minimum wage, multiplier factor, abolition of National Pension System in Railways etc. The railways specific issues mentioned in Part 'B' of charter of demands have also not been settled through discussions.

We have also conveyed to you that the industrial peact is being threatened in railways on account of Government's unreasonable and illogical decisions. During discussions, we have specially requested to kindly reach Hon'ble Prime Minister for conveying the total disappointment among all categories of railway employees and for finding ways and means to resolve matters to avert untoward developments in Railways. Here it is worth-mentioning tht on previous occasion too during the course of discussions, we had requested for out meeting with Hon'ble Prime Minister of India.

We therefore request you to kindly approach the Hon'ble Prime Minister for solving the issues amicably as we are keen to preserve healthy industrial relations in railways. We trust that the railway specific issues will be resolved through negotiations under your leadership without further delay.

Yours faithfully

(Shiva Gopal Mishra)
General Secretary/AIRF

General Secretary/NFIR