Comparison of 6th and 7th CPC Terms of Reference

1. Central government employees – industrial and non-industrial.
2. Personnel belonging to the All India Services.
3. Personnel belonging to the Armed Forces.
4. Personnel to the Union Territories.
5. Officers and employees of the Indian Audit and Accounts Department.
6. Members of the regulatory bodies (excluding the RBI) set up under Acts of
Parliament*.
7. Officers and employees of Supreme Court of India**.

B. To transform the Central Government Organisations into modern,
professional and citizen-friendly entities that are dedicated to the service
of the people.

C. To work out a comprehensive pay package for the categories of Central
Government employees mentioned at (A) above that is suitably linked to
promoting efficiency, productivity and economy through rationalization of
structures, organizations, systems and processes within the government, with a
view leveraging economy, accountability, responsibility, transparency,
assimilation of technology and discipline.

D. To harmonize the functioning of the Central Government Organisations with
the demands of the emerging global economic scenario. This would also take in
account, among other relevant factors, the totality of benefits available to
the employees, need of rationalization and simplification, thereof, the
prevailing pay structure and retirement benefits available under the Central
Public Sector Undertakings, the economic conditions in the country, the need
to observe fiscal prudence in the management of the economy, the resources of
the Central Government and the demands thereon on account of economic and
social development, defence, national security and the global economic
scenario, and the impact upon the finances of the States if the
recommendations are adopted by the States.

E. To examine the principles which should govern the structure of pension,
death-cum-retirement gratuity, family pension and other terminal or recurring
benefits having financial implications to the present and former Central
Government employees appointed before January 1, 2004.

F. To make recommendations with respect to the general principles, financial
parameters and conditions which should govern payment of bonus and the
desirability and feasibility of introducing Productivity Linked Incentive
Scheme in place of the existing ad hoc bonus scheme in various Departments
and to recommend specific formulae for determining the productivity index and
other related parameters.

G. To examine desirability and the need to sanction any interim relief till
the time the recommendations of the Commission are made and accepted by the
Government. *A. vi substituted by Ministry of Finance Resolution
No.5/2/20006-E.III (A) dated the 7th December, 2006. **A. vii substituted by
Ministry of Finance Resolution No.5/2/2006-E.III (A) dated the 8th August,
2007.

The Commission will devise its own procedure and may appoint such Advisers,
institutional consultants and experts, as it may consider necessary for any
particular purpose. It may call for such information and take such evidence,
as it may consider necessary. Ministries and Departments of the Government of
India will furnish such information and documents and other assistance as may
be required by the Commission.

The Government of India trusts that State Governments, Service Association
and others concerned will extend to the Commission their fullest cooperation
and assistance. The Commission will have its headquarters in Delhi.

The Commission will make its recommendations within 18 months of the date
of its constitution. It may consider, if necessary, sending reports
on any of the matters as and when the recommendations are finalized.

Cabinet approved TOR of 7th CPC 7th Central Pay Commission

The Union Cabinet today gave its approval to the Terms of Reference of 7th
Central Pay Commission (CPC) as follows:-
a) To examine, review, evolve and recommend changes that are desirable and
feasible regarding the principles that should govern the emoluments
structure including pay, allowances and other facilities/benefits, in
cash or kind, having regard to rationalization and simplification therein as
well as the specialized needs of various Departments, agencies and services,
in respect of the following categories of employees:-
i. Central Government employees-industrial and non-industrial;
ii. Personnel belonging to the All India Services;
iii. Personnel of the Union Territories;
iv. Officers and employees of the Indian Audit and Accounts Department;
v. Members of regulatory bodies (excluding the Reserve Bank of India) set up
under Acts of Parliament; and
vi. Officers and employees of the Supreme Court.

b) To examine, review, evolve and recommend changes that are desirable and
feasible regarding principles that should govern the emoluments structure,
concessions and facilities/benefits, in cash or kind, as well as retirement
benefits of personnel belonging to the Defence Forces, having regard to
historical and traditional parities, with due emphasis on aspects unique to
these personnel.

c) To work out the framework for an emoluments structure linked with the need
to attract the most suitable talent to Government service, promote
efficiency, accountability and responsibility in the work culture, and foster
excellence in the public governance system to respond to complex challenges
of modern administration and rapid political, social, economic and
technological changes, with due regard to expectations of stakeholders, and
to recommend appropriate training and capacity building through a competency
based framework.

d) To examine the existing schemes of payment of bonus, keeping
in view, among other things, its bearing upon performance and productivity
and make recommendations on the general principles, financial parameters and
conditions for an appropriate incentive scheme to reward excellence in
productivity, performance and integrity.

e) To review the variety of existing allowances presently available to
employees in addition to pay and suggest their rationalization and
simplification, with a view to ensuring that the pay structure is so
designed as to take these into account.

f) To examine the principles which should govern the structure of pension and
other retirement benefits, including revision of pension in the case of
employees who have retired prior to the date of effect of these
recommendations, keeping in view that retirement benefits of all Central
Government employees appointed on and after 01.01.2004 are covered by the New
Pension Scheme (NPS).

g) To make recommendations on the above, keeping in view:
i. the economic conditions in the country and need for fiscal prudence;
ii. the need to ensure that adequate resources are available for
developmental expenditures and welfare measures;
iii. the likely impact of the recommendations on the finances of the State
Governments, which usually adopt the recommendations with some modifications;
iv. the prevailing emolument structure and retirement benefits available to
employees of Central Public Sector Undertakings; and
v. the best global practices and their adaptability and relevance in Indian
conditions.

h) To recommend the date of effect of its recommendations on all the above. The Commission will make its recommendations within
18 months of the date of its constitution.

It may consider, if necessary, sending interim reports on any of the
matters as and when the recommendations are finalised. 

The decision will result in the benefit of improved pay and allowances as
well as rationalization of the pay structure in case of Central Government
employees and other employees included in the scope of the 7th Central Pay
Commission.

Background
Central Pay Commissions are periodically constituted to go into various
issues of emoluments’ structure, retirement benefits and other
service conditions of Central Government employees and to make
recommendations on the changes required.