HomeSeventh Pay Commission

Advantages and Disadvantages of Grade Pay System: What will be next in 7th CPC?

Only from 6th CPC, Grade Pay System was introduced with pay scales to different cadres in the department. Some of pay scale have been combined together to minimize many pay scales as done in other previous CPC recommendations. Let us discuss pros & cons of Grade Pay continuance.

A. Advantage of Grade Pay System

By introduction of Grade Pay from 6th CPC implementation, with effect 01.01.2006, the following benefits are available to the staff.
I. Availability of increased amount of increment every year
Previously, in the time scale of pay, two or stage fixed amount of increments for certain period had been prescribed implemented up to 5th CPC. Previous Pay scales has fixed amount of increment for certain period & thereafter, the increment amount fixed was a little higher amount, than previous one.
For Example: 

In Postal Department, Postman Pay Scale was in the pay scale 3050-75-3950-80-4590. By this pay scale, postmen officials were able to get Rs.75/ (or) 80/-as annual increment amount. This is constant for every year but, after 6th CPC 3% of increment is admissible in the pay drawn by the official with Grade Pay. This will be increased on the next increment date, as on 01.07, every year, by calculation of 3% increment, with previous year increment added amount. So, there will be an increase in increment amount, every year. This is more than getting fixed amount increment, as existed before. This is a great advantage to the staff, because increased of getting fixed amount of increment higher in increment amount is admissible every year, as tabled below.
Table showing increase in increment every year (not rounded off)
Pay In the Pay Band Grade Pay Basic Pay 3% of Increment 3% Constant Increment Different in Rupee Different in Percentage (%)
9300 4200 13500 405 405 0 0%
9710 4200 13910 417.3 405 12.3 2.95%
10130 4200 14330 429.9 405 24.9 5.79%
10560 4200 14760 442.8 405 37.8 8.55%
11010 4200 15210 456.3 405 51.3 11.24%
11470 4200 15670 470.1 405 65.1 13.85%
11950 4200 16150 484.5 405 79.5 16.41%
12440 4200 16640 499.2 405 94.2 18.89%
12940 4200 17140 514.2 405 109.2 21.24%
13460 4200 17660 529.8 405 124.8 23.55%
This increase indeed will have its impact in DA amount also whenever Revised DA is announced.

II. No Stagnation of Pay -after 6th CPC in Pay Bands
There will no stagnation at all in the Pay Band system, since it is a running scale process, after 6th CPC implementations, There is a uplift to jump up from PB – 1→ 5200-20200 to PB – II→ 9300-34800, in case, the official reached 20200 in the PB – 1, even though Grade Pay remains as same. (That is Rs.2800.
III. Adding of Grade Pay for Calculation of Increment

Increment is calculated for Grade Pay also, since it is form and part of new Pay Band, and this is paying way to set more amount of increments.

B. Disadvantage of Grade Pay System

I. Difference in pay fixation between promotivees and direct recuritees.

By introduction of Pay Band with Grade Pay System, entry Pay for direct recuritees, have been fixed more than, initial promotional pay, for the Promotivees. By this process, there is a difference of the pay between promotivees and direct recruitees, since entry pay is higher than the pay fixation done, by giving notional increment to the promotivees. This differenciation is not digestible by promotivees.
II. Grievances of Supervisory staff

Since, for operative staff and supervisory staff, only one Pay Band is available, with same grade pay, the supervisory Staff could not get 3% notional increment, on getting promotion to higher post.
III .Grievances of MTS Staff Got TBOP/BCR From 01-01-2006 to 31-08-2008

There is a disadvantage in Fixing Grade Pay to officials getting ACP and other Financial up gradations, during the period from 01-01-2006 to 31-08 -2008, by issue of order Dated 27-05-2014 it has been stated that Grade Pay of 1800 only is applicable to all MTS/ other staff getting financial up gradations between 01-01-06 to 31-08-2008, by cancelling TBOP/BCR/ACPs got during the period.
IV. Set back to Promotivees on getting MACP

In the MACP scheme, introduced with effect from 01-09-2008, as per 6th CPC Recommendations, there is a provision to take promotions got by writing Exam/on seniority/ACP/on TBOB – BCR, as first and Second MACPs, as the case may be. By this process, promotion/up gradation got form initial date of appointment, are being counted us first MACP/Second MACP. Lower grade officials promoted to higher post, by writing Exam/on Seniority/getting ACP/TBOB –BCR, are able to get lesser Grade Pay, at the time their Retirement, even though, they have completed 30 years of service, from the date of initial appointment. In the case of clerical they are able to get Grade Pay of 4200 only, as their last Grade pay whereas direct Recruitees are retiring with Grade pay of 4600. So, in order find out remedy to avoid this discrimination Pay Commission should have recommended fixing of pay on getting MACP, in the next higher Pay Band, with higher Grade Pay, but which was not done.
V. Differentiation between Pre & Post retirees, whose old Pay Scale was 6500-200-10500

By issue of clarification order by OM dated 11-02-2009, by DOPT & Training, it has differentiated Fixing of Grade Pay for those who got 6500 – 200 – 10500 pay Scale, prior to 01-01-2006, and for those retired on or after 01-01-2006. This is a contracting original OM. But it is in force till today, for fixing pensions to pre 2006 retirees with Grade Pay of 4200, instead of with Grade pay of 4600/- This is against Nakara case Judgement.
VI. Grievances of official drawing Grade Pay 1800 in Pay Band of 5200-20200

For those who are getting Grade Pay of 1800, in the Pay Band of 5200-20200, next MACP fixation with Grade Pay of 1900 only is available, after putting 10 year service. So also, the next Grade Pay applicable to them, after another 10 year service, Grade Pay is fixed as Rs.2000 with a raising Rs.100 only; this is the most disadvantage position now continuing.
And the writer of above article [geoed] has invited a poll, your views are expected on the continuance of Grade Pay in 7th CPC also. It is request to convey your opinions by stating clearly, regarding continuance of Pay Band with Grade Pay system or it’s discontinues after going through above factors deeply, your polling is anxiously awaited.

Click on picture to go to Poll


  • rameshwar, IA&AD 9 years ago

    Disadvantage no. 1 is non curable to me for life as my basic pay ₹ 6200 as steno grade II on 1.1.2006 was fixed at ₹ 11540 with grade pay ₹ 4200 whereas direct recruits at the same grade pay ₹ 4200 fixed pay at ₹ 12090 with grade pay ₹ 4200 on 1.1.2006. Unfortunately there is no direct recruits of grade pay ₹ 4200 in our small cadre. So no chance of step up for life long. 6th CPC damaged good pay structure as they failed to look into the case of promoters and upgradees.