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Seventh Pay Commission Report: Pay Structure (Civilian Employees) Chapter 5.1

Seventh Pay Commission Report


Pay
Structure
(Civilian
Employees)
Chapter
5.1
7thcpc+report+civilian+pay+structure


Historical
Perspective
on
Pay:
The
Trends
so
far


5.1.1 The thrust of all the previous Pay Commissions has been to propose an improvement in the pay structure by way of ‘simplification and rationalisation.’ The most visible results of this exercise are evident in terms of reduction in number of pay scales as well as the
compression ratio. Traditionally, compression ratio has been taken as a ratio of maximum salary drawn by the Secretary to Government of India to
minimum salary drawn by the lowest functionary in the government. Table 1 below brings out the trend in pay structure in the government of India over
the years:



Table
1
:
Pay
Structure


Central
P
ay
Commission
(CPC)
Minimum
Salary
(
Rs.)
Maximum
Salary
(
Rs.)
Compression
Ratio
Number
of
P
ay
Scales
I CPC (1946-47) 55 2000 1: 36.4 150 ->30
II CPC (1957-59) 80 3000 1: 37.5 500-> 140
III CPC (1972-73) 196 3500 1: 17.9 500 -> 80
IV CPC (1983-86) 750 8000 1: 10.7 153 -> 36
V CPC (1994-97) 2550 26000 1: 10.2 51 -> 34
VI CPC (2006-08) 7000 80000 1: 11.4 35 -> 19 [4 PBs with 15 GPs+ 4 distinct scales]

5.1.2 It can be seen from the table above that successive Pay Commissions have consciously tried to reduce the number of pay scales even though they
tended to increase during the intervening period between any two Pay Commissions. There were, however, no significant changes in the pay structure per
se until the IV CPC, when the concept of running pay scales was introduced in a limited way in respect of Defence forces. For others, individual pay
scales continued till the V CPC. It was the VI CPC which recommended running pay bands for both Civilians as well as Defence forces. This was coupled
with the introduction of the concept of Grade Pay as a level differentiator. Another new feature was the calculation of the annual increment on
percentage basis. Prior to VI CPC, the increment was a flat sum, depending on the pay scale. The effort at compression of levels was carried forward by
the VI CPC, which reduced the existing 35 levels to 19. Another radical measure was the doing away with ‘Group-D’as acategoryand placement of
‘Group-D’personnel in ‘Group-C’after appropriate training whenever necessary. Hence, it can be seen that the simplification process set in motion by
previous Pay Commissions acted as a precursor for progressive rationalisation by the subsequent Commissions.


Terms
of
Reference
with
regards
to
the
Pay
Structure
before
the
Seventh
CPC


5.1.3 One of the Terms of Reference (TOR) before this Commission is “to examine, review, evolve and recommendchanges that are desirable and feasible regarding the principles thatshould govern the emoluments structure including pay, allowances and otherfacilities and benefits in cash or kind having regard to rationalisation and simplification therein.”

5.1.4 Further, it is expected that the recommendations on the pay structure should ensure that the framework for an emoluments structure is linked with
the need to attract the most suitable talent to government service,promote efficiency, accountability and responsibility in the work culture, andfoster excellence in the public governance system to respond to complexchallenges of modern administration and rapid political, social, economic and technological changes, with due regard to expectations of stakeholders.”

5.1.5 The Commission has endeavored to incorporate the above principles while devising the new pay structure. The approach of the Commission has been
to ensure that the emolument structure is in consonance with the nature of work, role and responsibilities and accountability involved at various
levels of the hierarchyin the Government of India. Thevalue that individual employees are expected to bring to the job, by way of relevant educational
qualifications, skill sets and experience are also important considerations. Internal equity, by way of salaries payable at comparable levels within
the organization, are also important considerations.


Existing
System

5.1.6 The new paradigm of running pay bands was brought in by the VI CPC primarily to address the problem of stagnation faced in the earlier regime.
Until then the limited span of individual pay scales resulted in employees reaching the maximum of the scale and stagnating until their next regular
promotion. To alleviate the situation, often new posts were created even when no functional justification existed. This led to proliferation of levels
and unwarranted increase in financial liability. Frequent movement from one scale to another also led to problems in pay fixation of seniors who, in
some cases, ended up drawing lesser pay than their juniors.

5.1.7 At the time of constitution of the VI CPC there were about 35 standard pay scales in existence. Many of these pre revised scales were merged by
the VI CPC to arrive at 19 grades spread across four distinct Pay bands along with 4 distinct scales including one Apex scale (fixed) for
Secretary/equivalent and one scale for Cabinet Secretary/equivalent (fixed). The concept of Grade pay was intended as a fitment benefit but it also
served as a level determiner within a pay band.

5.1.8 Following implementation of the VI CPC recommendations, the pay structure in the Civilian set up consists of four pay bands with 15 levels of
grade pay, along with four standalone scales viz., the HAG scale, HAG+ scale, Apex scale (fixed) and the scale of Cabinet Secretary (fixed) as shown
below in Table 2:

Table
2
:
Present
Pay
Structure
(Civilian)*


Pay Band 1 (5200- 20200)
Grade Pay
1800
1900
2000
2400
2800
Pay Band 2 (9300-34800)
Grade Pay
4200
4600
4800
5400
Pay Band 3 (15600-39100)
Grade Pay
5400
6600
7600
Pay Band 4 (37400-67000)
Grade Pay
8700
8900
10000
HAG (67000-79000)
HAG+ (75500-80000)
Apex 80000 (fixed)
Cabinet Secretary 90000 (fixed)
*
For
the
Defence
Forces
the
structure
is
identical,
with
only
minor
variations
with
regard
to
certain
grade
pay
levels.

5.1.9 The pay structure as it stands today is fairly compact and manageable.

5.1.10 As has been mentioned earlier the VICPC introduced several new features in the overall structure for determination of pay and allowances. In the
course of implementation, while according approvals, the government, in some cases, departed from the recommendations of the Pay Commission.

5.1.11 Since the concept of running pay bands coupled with grade pays was novel, this Commission, at the outset, sought feedback from all stakeholders
regarding the existing pay structure before deciding whether to continue with the existing pay structure or to devise a new pay model.


Ke
y
Demands
Received


5.1.12 Consequent to receipt of feedback from various stakeholders as part of the response to the questionnaire circulated by the Commission as well as
memoranda submitted by various Association/Federations and during oral evidence, the major issues which have been brought to the notice of the
Commission in respect of the pay structure are discussed below seriatim:-

a. Grade pay: As mentioned earlier, the grade pay was in the nature of a fitment benefit and was computed at 40
percent of the maximum of pre-revised pay scale. This was also meant to delineate the hierarchy in any cadre. The issue raised by various groups of
employees is that the methodology that was adopted in arriving at the grade pay values resulted in the difference in grade pay between adjacent levels
not being uniform. This in itself has caused resentment particularly at the lower levels. The quantum of difference between successive grade pays
varies within pay bands too. For example in PayBand-1, the difference between successive Grade pays is Rs.400 between GP 2000 and GP 2400 and
only Rs.100 between GP 1800 and GP 1900. A large number of stakeholders have represented that the benefit accruing from progression either through MACP
or from regular promotion was miniscule, especially in Pay Bands 1 and 2. As per the rules on pay fixation a promotion or financial upgrade by way of
MACP fetches one increment plus the difference of grade pay and a low differential in grade pay presently results in only a nominal increase in pay.
Consequently, there have been numerous demands for rationalisation of the grade pay structure.

b. Pay bands: Employees have pointed out that while moving from one pay band to another the difference between
successive pay bands is also not uniform and the variation is much more remarkable between Pay bands 3 and 4. This has led to significant differencein
benefits accruingon account of fixationof pay(and of pension) for persons in adjacent pay bands. As a result, there have been demands from some
quarters for going back to the system of individual pay scales and from some other to move towards an open ended pay structure.

c. Uniform Fitment factor: The fitment recommended by the VI CPC was in the form of gradepay.
Anyinconsistencyin the computation of grade payor in thespacingbetween paybands has adirect bearingon thequantumof fitment benefit. Therefore,
theseissues have also been raised by numerous stakeholders. It has been demanded by a majority of the stakeholders that there should be a single
fitment factor which should be uniformly applied for all employees.
d. Entry Pay: Entry to any pay band could either be through an upward movement from alower payband or through direct entry.
Whilethe payof persons moving from alower pay band to a higher one on promotion would be regulated by the pay fixation formulation prescribed (pay was
fixed at the minimum of the pay band plus grade pay), the VICPC had recommended a separate entrypay for new recruits, takinginto account the length of
qualifying service prescribed by Department of Personnel and Training (DoPT) for movement from the first grade in the pay band to the grade in which
recruitment was being made. The resultant formulation was such that it led to many situations where direct recruits drew higher pay as compared to
personnel who reached that stage through promotion. Demands have been received from many staff associations and employees for removal of this
disparity.

e. MACP: In almost all the memoranda received in the Commission, the inadequacy of the benefit accruing from the present MACP formulation
has been underscored. As per the existing dispensation, upward movement in this scheme is through the grade pay hierarchy and the financial
benefit as a result of this progression is equivalent to one increment plus the difference in grade pay between the existing and next level. It has
been stated by employees that this amount is very meagre especially when the difference in grade pay is as low as Rs.100. Further, progression through
the MACP scheme can take place only when ten years have lapsed after the previous promotion/MACP upgrade, making the position even starker. Comparisons
are also made of the MACP introduced post VI CPC with the ACP scheme introduced post V CPC. In the case of earlier ACP scheme, although it was
available with lesser frequency i.e., after the passage of 12 and 24 years of service, the upgrade that was given was in the promotional
hierarchy. Therefore the monetary benefit to the employeewas sizeable as compared to that under the present MACP. Numerous demands have therefore been
received in the Commission to rationalize the progression of grade pay, to increase the frequency of administering MACP and to make the progression
follow the promotional instead of the grade pay hierarchy.

New
Pay
Structure

5.1.13 Although the VI CPC had mentioned that grade pay would be equivalent to 40 percent of the maximum of the pre-revised scale and that the grade
pay will constitute the actual fitment, yet the computation varied greatly. After the implementation of recommendations, the difference became more
pronounced in Pay Band 4 as compared to the other three pay bands. This resulted in varying fitment factors for various levels and promotional benefits
that were perceived to be rather differentiated. The same pattern was discernible in the pension fixation too.

5.1.14 After analysing the issues brought out by various stakeholders, this Commission is suggesting a new pay model that is expected to not only
address the existing problems but will also establish a rationalised system which is transparent and simple to use.

5.1.15 To begin with, the system of Pay Bands and Grade Pay has been dispensed with and the new functional levels being proposed have been arrived at
by merging the grade pay with the pay in the pay band. All of the existing levels have been subsumed in the new structure; no new level has been
introduced nor has any existing level been dispensed with.

5.1.16 The pay structures in vogue, by way of pay scales or pay bands, indicate the definite boundaries within which the pay of an individual could
lie. It is however difficult to ascertain the exact pay of an individual at any given point of time. Further, the way the pay progression would fan out
over a period of time was also not evident. Since various cadres are designed differently the relative pay progression also varies. The Commission
believes that any new entrant to a service would wish to be able to make a reasonable and informed assessment of how his/her career path would traverse
and how the emoluments will progress alongside. The new pay structure has been devised in the form of a pay matrix to provide complete transparency
regarding pay progression.

5.1.17 The Commission has designed the new pay matrix keeping in view the vast opportunities that have opened up outside government over the last three
decades, generating greater competition for human resources and the need to attract and retain the best available talent in government services. The
nomenclature being used in the new pay matrix assigns levels in place of erstwhile grade pay and Table 3 below brings out the new dispensation for
various grades pay pertaining to Civil, Defence and MNS.

7thcpc+pay+matrix

Table
3
:
Levels
as
per
the
Pay
Matrix

Existing
Pa
y
Bands
Existing
levels
of
Grade
Pay
Available
for*
New
Levels
PB-1
1800
C
1
1900
C
2
2000
C,D
3
2400
C
4
2800
C,D
5
PB-2
3400
D
5A
4200
C,D
6
4600
C,D
7
4800
C,D
8
5400
C
9
PB-3
5400
C,D,M
10
5700
M
10A
6100
D
10B
6100
M
10B
6600
C,D,M
11
7600
C
12
PB-4
7600
M
12
8000
D
12A
8400
M
12B
8700
C
13
8700
D
13
8900
C
13A
8900
D
13A
9000
M
13B
10000
14
HAG
15
HAG+
16
Apex
17
Cabinet Secretary, Defence Chiefs
18
*C: Civil; D: Defence; M: Military Nursing Service (MNS)

5.1.18 Prior to VI CPC, there were Pay Scales. The VI CPC had recommended running Pay Bands with Grade Pay as status determiner. The Seventh CPC is
recommending a Pay matrix with distinct Pay Levels. The Level would henceforth be the status determiner.

5.1.19 Since the existing pay bands cover specific groups of employees such as PB-1 for Group `C’ employees, PB-2 for Group `B’ employees and PB-3
onwards for Group `A’ employees, any promotion from one pay band to another is akin to movement from one group to the other. These are significant
jumps in the career hierarchy in the Government of India. Rationalisation has been done to ensure that the quantum of jump, in financial terms, between
these pay bands is reasonable. This has been achieved by applying‘index of rationalisation’ from PB-2 onwards on the premise that with enhancement of
levels from Pay Band 1 to 2, 2 to 3 and onwards, the role, responsibility and accountability increases at each step in the hierarchy. The proposed pay
structure reflects the same principle. Hence, the existing entry pay at each level corresponding to successive grades payin each payband, from PB-2
onwards, has been enhanced by an ‘index of rationalisation’ as shown below in Table 4:

Table
4
:
Rationalisation
Applied
in
the
Present
Pay
Structure

7thcpc+rationalisation+present+pay+structure.jpg


Pay Band 1
(5200- 20200)
Grade Pay 1800 1900 2000 2400 2800
Current Entry Pay 7000 7730 8460 9910 11360
Rationalised Entry Pay (2.57) 7000*(2.57) =18000 7730*(2.57) =19900 8460*(2.57) =21700 9910*(2.57) =25500 11360*(2.57) =29200
Pay Band 2
(9300-34800)
Grade Pay 4200 4600 4800 5400
Current Entry Pay 13500 17140 18150 20280^
Rationalised Entry Pay (2.62) 13500*(2.62) =35400 17140*(2.62) =44900 18150*(2.62) =47600 20280*(2.62) =53100
Pay Band 3
(15600-39100)
Grade Pay 5400 6600 7600
Current Entry Pay 21000 25350 29500
Rationalised Entry Pay (2.67) 21000*(2.67) =56100 25350*(2.67) =67700 29500*(2.67) =78800
Pay Band 4
(37400-67000)
Grade Pay 8700 8900 10000
Current Entry Pay 46100 49100 53000
Rationalised Entry Pay (2.57/2.67/2.72) 46100*(2.57) =118500 49100*(2.67) =131100 53000*(2.72) =144200
HAG
(67000-79000)
Current Entry Pay 67000
Rationalised Entry Pay (2.72) 67000*(2.72) =182200
HAG+
(75500-80000)
Current Entry Pay 75500
Rationalised Entry Pay (2.72) 75500 *(2.72) =205400
Apex
80000 (fixed)
Rationalised Pay (2.81) 80000*2.81 =225000
Cabinet Secretary
90000 (fixed)
Rationalised Pay (2.78) 90000*2.78 =250000
^ In the existing system no entry pay has been prescribed at thelevel of GP 5400 (PB-2). Therefore a logical figure has beeninterpolated here based on the fitment table issued by Government of India post VI CPC recommendations.


5.1.20 While a carefully calibrated gradation has been adopted as the levels progress upwards, it would be seen that two levels, corresponding to GP
8700 and GP 10000 witness a slight departure.
i. In the existing system there is a disproportionate increase in entry pay at the level pertaining to GP 8700. To address this, the proposed increase
at this level has been moderated.

ii. In so far as GP 10000 is concerned, this represents the Senior Administrative Grade, which carries a significantlyhigher degreeof responsibilityand
accountability. Further, the levels of SAG and above are those which are involved in policy formulation.

iii. Hence, in recognition of the same, the entry pay pertaining to GP 10000 as well as that of HAG and HAG+ has been enhanced by a multiple of 2.72.

iv. TheApexpayof Secretary/equivalent and pay of Cabinet Secretary/equivalent has been fixed by applying indices of 2.81 and 2.78 respectively. The
rationalised entry pay so arrived has been used in devising the new pay matrix.

5.1.21 The pay matrix comprises two dimensions. It has a “horizontal range” in which each level corresponds to a ‘functional role in the hierarchy’ and has been assigned the numbers 1, 2, and 3 and so on till 18. The “vertical range”
for each level denotes ‘pay progression’ within that level. These indicate the steps of annual financial progression of three percent
within each level. The starting point of the matrix is the minimum pay which has been arrived based on 15th ILC norms or the Aykroyd formula. This has
already been explained in Chapter 4.2.


5.1.22 On recruitment, an employee joins at a particular level and progresses within the level as per the vertical range. The movement is usually on an
annual basis, based on annual increments till the time of their next promotion.

5.1.23 When the employee receives a promotion or a non-functional financial upgrade, he/she progresses one level ahead on the horizontal range.

5.1.24 The pay matrix will help chart out the likely path of pay progression along the career ladder of any employee. For example, it can be clearly
made out that an employee who does not have any promotional prospects in his cadre will be able to traverse through at least three levels solely by means of assured financial progression or MACP, assuming a career span of 30 years or more.

5.1.25 The new pay matrix for civilian employees is brought out in Table 5: 
7thcpc+new+pay+matrix+grade+pay.jpg


Table
5:
Pay
Matrix
(Civilian
Employees)

Pay
Band
5
200-20200
Grade
Pay
1
800
1
900
2
000
2
400
2
800
E
ntry
Pay
(EP)
7
000
7
730
8
460
9
910
1
1360
Le
vel
1
2
3
4
5
Index
2
.
5
7
2
.
5
7
2
.
5
7
2
.
5
7
2
.
5
7
1
18000
19900
21700
25500
29200
2
18500
20500
22400
26300
30100
3
19100
21100
23100
27100
31000
4
19700
21700
23800
27900
31900
5
20300
22400
24500
28700
32900
6
20900
23100
25200
29600
33900
7
21500
23800
26000
30500
34900
8
22100
24500
26800
31400
35900
9
22800
25200
27600
32300
37000
10
23500
26000
28400
33300
38100
11
24200
26800
29300
34300
39200
12
24900
27600
30200
35300
40400
13
25600
28400
31100
36400
41600
14
26400
29300
32000
37500
42800
15
27200
30200
33000
38600
44100
16
28000
31100
34000
39800
45400
17
28800
32000
35000
41000
46800
18
29700
33000
36100
42200
48200
19
30600
34000
37200
43500
49600
20
31500
35000
38300
44800
51100
21
32400
36100
39400
46100
52600
22
33400
37200
40600
47500
54200
23
34400
38300
41800
48900
55800
24
35400
39400
43100
50400
57500
25
36500
40600
44400
51900
59200
26
37600
41800
45700
53500
61000
27
38700
43100
47100
55100
62800
28
39900
44400
48500
56800
64700
29
41100
45700
50000
58500
66600
30
42300
47100
51500
60300
68600
31
43600
48500
53000
62100
70700
32
44900
50000
54600
64000
72800
33
46200
51500
56200
65900
75000
34
47600
53000
57900
67900
77300
35
49000
54600
59600
69900
79600
36
50500
56200
61400
72000
82000
37
52000
57900
63200
74200
84500
38
53600
59600
65100
76400
87000
39
55200
61400
67100
78700
89600
40
56900
63200
69100
81100
92300


Pay
Band
9
300-34800
Grade
Pay
4
200
4
600
4
800
5
400
E
ntry
Pay
(EP)
1
3500
1
7140
1
8150
2
0280
Le
vel
6
7
8
9
Index
2
.
6
2
2
.
6
2
2
.
6
2
2
.
6
2
1
35400
44900
47600
53100
2
36500
46200
49000
54700
3
37600
47600
50500
56300
4
38700
49000
52000
58000
5
39900
50500
53600
59700
6
41100
52000
55200
61500
7
42300
53600
56900
63300
8
43600
55200
58600
65200
9
44900
56900
60400
67200
10
46200
58600
62200
69200
11
47600
60400
64100
71300
12
49000
62200
66000
73400
13
50500
64100
68000
75600
14
52000
66000
70000
77900
15
53600
68000
72100
80200
16
55200
70000
74300
82600
17
56900
72100
76500
85100
18
58600
74300
78800
87700
19
60400
76500
81200
90300
20
62200
78800
83600
93000
21
64100
81200
86100
95800
22
66000
83600
88700
98700
23
68000
86100
91400
101700
24
70000
88700
94100
104800
25
72100
91400
96900
107900
26
74300
94100
99800
111100
27
76500
96900
102800
114400
28
78800
99800
105900
117800
29
81200
102800
109100
121300
30
83600
105900
112400
124900
31
86100
109100
115800
128600
32
88700
112400
119300
132500
33
91400
115800
122900
136500
34
94100
119300
126600
140600
35
96900
122900
130400
144800
36
99800
126600
134300
149100
37
102800
130400
138300
153600
38
105900
134300
142400
158200
39
109100
138300
146700
162900
40
112400
142400
151100
167800


Pay
Band
15600-39100
Grade
Pay
5
400
6
600
7
600
E
ntry
Pay
(EP)
2
1000
2
5350
2
9500
Le
vel
1
0
1
1
1
2
Index
2
.
6
7
2
.
6
7
2
.
6
7
1
56100
67700
78800
2
57800
69700
81200
3
59500
71800
83600
4
61300
74000
86100
5
63100
76200
88700
6
65000
78500
91400
7
67000
80900
94100
8
69000
83300
96900
9
71100
85800
99800
10
73200
88400
102800
11
75400
91100
105900
12
77700
93800
109100
13
80000
96600
112400
14
82400
99500
115800
15
84900
102500
119300
16
87400
105600
122900
17
90000
108800
126600
18
92700
112100
130400
19
95500
115500
134300
20
98400
119000
138300
21
101400
122600
142400
22
104400
126300
146700
23
107500
130100
151100
24
110700
134000
155600
25
114000
138000
160300
26
117400
142100
165100
27
120900
146400
170100
28
124500
150800
175200
29
128200
155300
180500
30
132000
160000
185900
31
136000
164800
191500
32
140100
169700
197200
33
144300
174800
203100
34
148600
180000
209200
35
153100
185400
36
157700
191000
37
162400
196700
38
167300
202600
39
172300
208700
40
177500


Pay
Band
3
7400-67000
Grade
Pay
8
700
8
900
1
0000
E
ntry
Pay
(EP)
4
6100
4
9100
5
3000
Le
vel
13
13A
14
Index
2
.
5
7
2
.
6
7
2
.
7
2
1
118500
131100
144200
2
122100
135000
148500
3
125800
139100
153000
4
129600
143300
157600
5
133500
147600
162300
6
137500
152000
167200
7
141600
156600
172200
8
145800
161300
177400
9
150200
166100
182700
10
154700
171100
188200
11
159300
176200
193800
12
164100
181500
199600
13
169000
186900
205600
14
174100
192500
211800
15
179300
198300
218200
16
184700
204200
17
190200
210300
18
195900
216600
19
201800
20
207900
21
214100




Pay
Band
6
7000-79000
7
5500-80000
8
0000
9
0000
Grade
Pay
E
ntry
Pay
(EP)
6
7000
7
5500
8
0000
9
0000
Le
vel
15
16
17
18
Index
2
.
7
2
2
.
7
2
2
.
8
1
2
.
7
8
1
182200
205400
225000
250000
2
187700
211600
3
193300
217900
4
199100
224400
5
205100
6
211300
7
217600
8
224100
9

Minimum
Pay

5.1.26 The JCM-Staff Side, in their memorandum, have proposed that the minimum salary, at the lowest level, should be determined using a need based
approach. They have proposed that the minimum wage for a single worker be based on the norms set by the 15th Indian Labour Conference, with certain
additions to the same. The minimum pay as suggested in the memorandum is Rs.26,000, which is around 3.7 times the existing minimum salary of Rs.7,000.
While the broad approach is similar, the specifics do vary and the Commission has, based on need-based minimum wage for a single worker with family as
defined in the Aykroyd formula, computed the minimum payat Rs.18,000. Details on the computation of minimum payhave been brought out in Chapter 4.2.

Fitment

5.1.27 The starting point for the first level of the matrix has been set at Rs.18,000. This corresponds to the starting pay of Rs.7,000, which is the
beginning of PB-1 viz., Rs.5,200 + GP 1800, which prevailed on 01.01.2006, the date of implementation of the VI CPC recommendations. Hence the starting
point now proposed is 2.57 times of what was prevailing on 01.01.2006. This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on
account of DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. Accordingly,
the actual raise/fitment being recommended is 14.29 percent.

Pay
Fixation
in
the
New
Pay
Structure

5.1.28 The fitment of each employee in the new pay matrix is proposed to be done by multiplying his/her basic pay on the date of implementation by a factor
of 2.57. The figure so arrived at is to be located in the new pay matrix, in the level that corresponds tothe employee’s grade pay on the date of implementation, except in cases where the Commission has recommended a change in the existing grade pay
. If the identical figure is not available in the given level, the next higher figure closest to it would be the new pay of the concerned employee. A
couple of examples are detailed below to make the process amply clear.

5.1.29 The pay in the new pay matrix is to be fixed in the following manner:


Step
1
: Identify Basic Pay (Pay in the pay band plus Grade Pay) drawn by an employee as on the date of implementation. This figure is ‘A’.


Step
2
: Multiply ‘A’ with 2.57, round-off to the nearest rupee, and obtain result ‘B’.


Step
3
: The figure so arrived at, i.e., ‘B’ or the next higher figure closest to it in the Level assigned to his/her grade pay, will be the new pay in the new
pay matrix. In case the value of ‘B’ is less than the starting pay of the Level, then the pay will be equal to the starting pay of that level.


Example I
i. For example an employee H is presently drawing Basic Pay of Rs.55,040 (Pay in the Pay Band Rs.46340 + Grade Pay Rs.8700 = Rs.55040). After
multiplying Rs.55,040 with 2.57, a figure of Rs.1,41,452.80 is arrived at. This is rounded off to Rs.1,41,453.

ii. The level corresponding to GP 8700 is level 13, as may be seen from Table 4, which gives the full correspondence between existing Grade Pay and the new
Levels being proposed.

iii. In the column for level 13, the figure closest to Rs.1,41,453 is Rs.1,41,600.

iv. Hence the pay of employee H will be fixed at Rs.1,41,600 in level 13 in the new pay matrix as shown below:


Table
6
:
Pay
Fixation

GP
8700
GP
8900
GP
10000
Level
13
Level
13A
Level
14
118500 131100 144200
122100 135000 148500
125800 139100 153000
129600 143300 157600
133500 147600 162300
137500 152000 167200
141600 156600 172200
145800 161300 177400
150200 166100 182700

5.1.30 As part of its recommendations if Commission has recommended any upgradation or downgrade in the level of a particular post, the person would be
placed in the level corresponding to the newly recommended grade pay.


Example II
i. Takethe case of an employee T in GP 4200, drawingpayof Rs.20,000in PB-2. TheBasic Payis Rs.24,200 (20,000+4200). If there was to be no change in T’s
level the pay fixation would have been as explained in Example I above. After multiplying by 2.57, the amount fetched viz., Rs.62,194 would have been
located in Level 6 and T’s pay would have been fixed in Level 6 at Rs.62,200.

ii. However, assuming that the Commission has recommended that the post occupied by T should be placed one level higher in GP 4600. T’s basic pay would
then be Rs.24,600 (20000 + 4600). Multiplying this by 2.57 would fetch Rs.63,222.

iii. This value would have to be located in the matrix in Level 7 (the upgraded level of T).

iv. In the column for Level 7 Rs.63,222 lies between 62200 and 64100. Accordingly, the pay of T will be fixed in Level 7 at Rs.64,100.


Entry
Pay

5.1.31 The Commission has received numerous representations on the issue of fixation of entry pay for direct recruits at a level higher than those promoted
into the same level from below. In the existing system, the entry pay for new or direct recruits takes into consideration the weightage given to qualifying
service prescribed by DoPT, whereas for those reaching the grade through promotion from lower grade, the entry pay is fixed at the minimum of the pay band
plus grade pay corresponding to the new grade. The entry pay therefore varies, and is different for those entering a level directly and those getting
promoted into it. There have been demands for a uniform entry pay for all.

5.1.32 In the new pay matrix, it is proposed that direct recruits start at the minimum pay corresponding to the level to which recruitment is made, which
will be the first cell of each level. For example a person entering service as a direct recruit at level 3 will get a pay of Rs.21,700, at level 8 of
Rs.47,600, at level 10 of Rs.56,100 and so on.

5.1.33 For those who have been promoted from the previous level, the fixation of pay in the new level will depend on the pay they were already drawing in the
previous level. For instance, if a person who was drawing Rs.26,000 in level 3 gets a promotion to level 4, his pay fixation will be as shown in Table 7:

Table
7
:
Entry
Pay

L3 L4 L5 L6 L7 L8
21700 25500 29200 35400 44900 47600
22400 26300 30100 36500 46200 49000
23100 27100 31000 37600 47600 50500
23800 27900 31900 38700 49000 52000
24500 28700 32900 39900 50500 53600
25200 29600 33900 41100 52000 55200
26000 30500 34900 42300 53600 56900
26800 31400 35900 43600 55200 58600
27600 32300 37000 44900 56900 60400
28400 33300 38100 46200 58600 62200
29300 34300 39200 47600 60400 64100
30200 35300 4
0400
49000 62200 66000
31100 36400 41600 50500 64100 68000


Step
1:
After grant of one increment in level 3 the pay increases to Rs.26,800 in level 3 itself.


Step
2:
Locate the equal or next higher amount in level 4 which in this case will be Rs.27,100. Hence the new pay on promotion from level level 3 to level 4 will
be fixed at Rs.27,100.
5.1.34 In case of a direct recruit to level L4 the entry pay will be fixed at the start of the level L4 i.e., at Rs.25,500.

5.1.35 To take another example, if a person drawing Basic Pay of, say, Rs.40,400 in level L5 is promoted to L7, the steps to arriving at his pay on
promotion will be to first add one increment within level L5 to arrive at Rs.41,600, and then fix the pay at Rs.44,900 in level L7 as Rs.44,900 is the
nearest, next higher figure to Rs.41,600 in the column of figures for level L7.

5.1.36 Although the rationalisation has been done with utmost care to ensure minimum bunching at most levels, however if situation does arise whenever more
than two stages are bunched together, one additional increment equal to 3 percent may be given for every two stages bunched, and pay fixed in the
subsequent cell in the pay matrix.

5.1.37 For instance, if two persons drawing pay of Rs.53,000 and Rs.54,590 in the GP 10000 are to be fitted in the new pay matrix, the person drawing pay
of Rs.53,000 on multiplication by a factor of 2.57 will expect a pay corresponding to Rs.1,36,210 and the person drawing pay of Rs.54,590 on multiplication
by a factor of 2.57 will expect a pay corresponding to Rs.1,40,296. Revised pay of both should ideally be fixed in the first cell of level 15 in the pay of
Rs.1,44,200 but to avoid bunching the person drawing pay of Rs.54,590 will get fixed in second cell of level 15 in the pay of Rs.1,48,500.


Annual
I
ncrement

5.1.38 The rate of annual increment is being retained at 3 percent.


Span
of
Each
Level

5.1.39 In the true spirit of having open ended pay scales the span of levels 1 to 11 has been kept at 40 years. This has been done to ensure that no
stagnation takes place. However, level 12 and beyond, the span of successive levels has been reduced so that the maximum at each level is lower than the
maximum pay at the subsequent level. This has been done as a result of capping of maximum pay at HAG+ (level 16) at a lower stage as compared to the Apex
pay at level 17. Since Apex pay at level 17 is fixed at Rs.2,25,000, a person residing in the previous level (level 16) should not draw equivalent or more
than the apex pay, the maximum pay has been restricted to Rs.2,24,400. Similarly the process has been followed until level 11 keeping in mind the maximum
pay drawn by the person in the next higher level. Accordingly, the span of levels beyond level 11 progressively reduces from 39 years at level 11 to 4
years at level 16. It is important to note that the end-points of any column do not signify the end points of any traditional pay
scale. Hence in any kind of calculation which attempts to work with the “maximum pay of a particular pay scale” it would be inappropriate, even incorrect,
to pick the last figure of the column to be so. As has been stated earlier in this paragraph the column spans have been kept at 40 to cater to persons who
may enter a particular level at any stage and may have resided in the level for a fair length of time. The end-points of the column, representing the
possible highest and lowest pay in that level, may not be treated as the maximum and minimum of any closed pay scale, as used to prevail prior to the implementation of the VI CPC.


Compression
Ratio

5.1.40 This Commission has felt that comparison of entry pay of the lowest functionary in the government with the highest pay drawn by the Secretary to
Government of India is not appropriate. The comparison should be like to like while calculating the compression ratio. Accordingly, the lowest pay at
entrylevel of Group `C’ should be compared with the entry pay of Group `A’ to arrive at the compression ratio. This Commission has recommended a minimum
pay of Rs.18,000 at entry level in Group `C’ and Rs.56,100 as entry pay at Group `A’ level. The compression ratio is thus arrived at 1: 3.12 which signifies that a Group `A’ officer entering the government on direct recruitment basis
gets roughly three times the pay drawn by a Group `C’ level functionary at their entry level.

5.1.41 Similarly comparisons can be made between maximum pay (Rs.56,800) of any employee who has joined in level 1 and rendered 35 years of service and
received pay progression solely by way of MACP with the maximum pay of Rs.2,25,000 drawn by Group `A’ officer at Apex level (level 17), thecompression ratio works out to be 1:3.96.Sincethe maximum paydrawn for different officials will depend
on their age of entry, promotional prospects in their services/cadres and individual performance, the minimum pay at entry level is considered a better
comparator.


Date
of
Effect


5.1.42 The various associations of the JCM-Staff Side have demanded that the recommendations of this Commission should be implemented w.e.f. 01.01.2014.
Their argument is that there has been substantial erosion in the value of wages owing to non-merger of DA, which has crossed the 100 percent mark in
January 2014. They have also demanded wage revision after every five years, instead of the present decennial exercise.

5.1.43However, itis to benoted that this Commission was constituted in year 2014, wellbefore the completion of ten years since the implementation of the VI
CPC recommendations, which were made effective on 01.01.2006. As a result, its recommendations would be available for consideration before the ten year
period gets over on 01.01.2016. The Commission does not agree with the demand of early implementation of revised pay structure and recommends that the date of effect should be 01.01.2016.


Modified
Assured
Career
Progression
(MACP)

5.1.44 Although a number of demands were received for increasing the frequency of MACP as well as to enhance the financial benefit accruing out of it, this
Commission feels that the inherent issues in the existing pay structure owing to which there was widespread resentment have been set right by way of
rationalisation of pay levels, abolition of pay band and grade pay and introduction of a matrix based open pay structure. Hence, there is no justification for increasing the frequency of MACP and it will continue to be
administered at 10, 20 and 30 years as before. In the new Pay matrix, the employees will move to the immediate next level in the hierarchy. Fixation of pay
will follow the same principle as that for a regular promotion in the pay matrix. MACP will continue to be applicable to all employees up to HAG level
except members of Organised Group `A’ Services where initial promotions up to NFSG are time bound and hence assured.

5.1.45 There is, however, one significant aspect where this Commission feels that a change is required. This is with regard to the benchmark for
performance appraisal for MACP as well as for regular promotion. The Commission recommends that this benchmark,in the interest of improving performance level, be enhanced from ‘Good’ to ‘Very Good.’ In addition, introduction of more stringent criteria such as clearing of departmental examinations or mandatory
training before grant of MACP can also be considered by the government.

Withholding
Annual
Increments
of
Non-performers
after
20
Years


5.1.46 There is a widespread perception that increments as well as upward movement in the hierarchy happen as a matter of course. The perception is that
grant of MACP, although subject to the employee attaining the laid down threshold of performance, is taken for granted. This Commission believes that
employees who do not meet the laid down performance criterion should not be allowed to earn future annual increments. The Commission is therefore proposing
withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the
first 20 years of their service. This will act as a deterrent for complacent and inefficient employees. However, since this is not apenalty, thenorms for
penal action in disciplinarycasesinvolving withholdingincrements will not be applicable in such cases. This will be treated as an “efficiency bar”.
Additionally, for such employees there could be an option to leave service on similar terms and conditions as prescribed for voluntary retirement.

Benefits
of
Migrating
to
a
New
System


5.1.47 The following benefits are expected to accrue by migrating to the new system:

a. The issues raised by various stakeholders in respect of the existing pay structure have been addressed by subsuming of grade pay and pay bands into one
composite level.

b. The correction of variable spacing between adjacent grade pay and pay bands by way of rationalisation has been effected. The disparity between PB-3 and
PB-4 has been set right by the process of normalisation. This will also help address the demands for upgradation of grade pay received in the Commission
solely on grounds of disparity between various pay bands.

c. The fixation of revised pay has been greatly simplified in the new pay matrix and will not involve further calculations. The basic pay being drawn by
any person on the date of implementation is to be multiplied by a factor of 2.57 and the figure so obtained will be matched for the closest figure in the level pertaining to his/her existing grade pay and fixed there.

d. The issue of differential entry pay has been resolved.

e. The employee can traverse both vertically within a level in the new pay matrix by way of annual progression, and horizontally across levels by way of
MACP as well as on regular promotion. This will enable him/her to visualise the career path across levels and span of service.

f. The new matrix will provide greater visibility and transparency with respect to actual pay drawn as compared to the earlier system of pay scales or pay
bands. It will also depict the exact amount payable to a person in relation to number of years spent in service in each level.

g. The new pay matrix is expected to be easy to administer.

h. In line with the principle of greater transparency, the new pay matrix will provide an unambiguous and complete view of the pay system in the Government
of India.

i. The pay matrix can be gainfully analysed to provide crucial data on trends in pay progression, number of personnel populating each level, number of
personnel entering and retiring at various levels, promotional trends of various cadres, financial outgo at various levels, and so on. Hence, it can act as
a powerful tool to bring in financial management reforms.

5.1.48 Similar pay matrices have been designed for the personnel of defence forces and the MNS so as to ensure uniformity in pay structures.

5.1.49 The Commission, after its interaction with the authorities of Australia and New Zealand, feels that India should also have a permanent Remuneration
Authority that should review the pay structure based on job roles evaluation, remuneration prevailing in the market for comparable job profiles, general
workingof the economy, etc. within a given budgetaryoutlay. With this, the pay structure could be revised periodically, at more regular intervals, say
annually, without putting an undue burden on the public exchequer every ten years, as is the casenow. Such aperiodic reviewmayhavemanypossible fallouts:
impact of revision of wages could be easily absorbed in each year’s budget and quicker remediation of anomalies would take place, leading to greater
employee satisfaction. In the backdrop of annual revisions, the present system of biannual revision of DA could also be dispensed with.

Some
Additional
Illustrative
Examples
in
Respect
of
Pay
Fixation
in
the
New
Pay
Matrix


5.1.50 Normal Fitment
Ms. ABC is presently drawing a Basic Pay of Rs.12,560 in GP 2400. For Normal Fitment, her Basic Pay will first be multiplied by a factor of
2.57 and then rounded-off to the nearest Rupee. In this case 12560 x 2.57 = 32,279.20, which will be rounded-off to Rs.32,279. She will
then be placed in the Pay Matrix in the Level corresponding to GP 2400 (Level 4 in this case) in a cell either equal to or next higher to
Rs.32,279. In this case, her salary will be fixed at Rs.32,300.
Pay
Band
5200-20200
Grade
Pay
1800 1900 2000 2400 2800
Entry
Pay
(EP)
7000 7730 8460 9910 11360
Levels 1 2 3 4 5
Index 2.57 2.57 2.57 2.57 2.57
1 18000 19900 21700 25500 29200
2 18500 20500 22400 26300 30100
3 19100 21100 23100 27100 31000
4 19700 21700 23800 27900 31900
5 20300 22400 24500 28700 32900
6 20900 23100 25200 29600 33900
7 21500 23800 26000 30500 34900
8 22100 24500 26800 31400 35900
9 22800 25200 27600 32300 37000
10 23500 26000 28400 33300 38100
11 24200 26800 29300 34300 39200

5.1.51 Upgraded by Seventh CPC
Suppose, Ms. ABC, who is presently drawing a Basic Pay of Rs.12,560 in GP 2400 (10160+2400), is upgraded to GP 2800 as a result of Seventh
CPC’s recommendations. Then the fitment will be in two steps:1. The new basic pay will be computed using the upgraded grade pay. The pay
arrived will be as follows:Basic Pay: 10160+2800=12,960.2. Then this value will be multiplied by a factorof2.57 and then rounded-offto the
nearest Rupee. In this case 12960 x 2.57 = 33,307.20, which will be rounded-off to Rs.33,307.She will thenbeplaced inthe PayMatrix in the
Level correspondingto her upgraded Grade Pay, i.e. GP 2800 (Level 5 in this case)in acell eitherequal to or next higher to Rs.33,307. In
this case, her salary will be fixed at Rs.33,900.
Pay
Band
5200-20200
Grade
Pay
1800 1900 2000 2400 2800
Entry
Pay
(EP)
7000 7730 8460 9910 11360
Levels 1 2 3 4 5
Index 2.57 2.57 2.57 2.57 2.57
1 18000 19900 21700 25500 29200
2 18500 20500 22400 26300 30100
3 19100 21100 23100 27100 31000
4 19700 21700 23800 27900 31900
5 20300 22400 24500 28700 32900
6 20900 23100 25200 29600 33900
7 21500 23800 26000 30500 34900

5.1.52 Promotion/MACP
Suppose, Ms. ABC, who, after having been fixed in the Pay Matrix, is drawing a Basic Pay of Rs.28,700 in Level 4. She is upgraded to Level
5 (either regular promotion or through MACP). Then her salary will be fixed in the following manner:

1. She will first be given one increment in her current Level 4 (to Rs.29,600 in this case).

2. Then she will be placed in the Level 5 at a Level equal to or next higher compared to Rs.29,600, which comes to Rs.30,100 in this case.
Pay
Band
5200-20200
Grade
Pay
1800 1900 2000 2400 2800
Entry
Pay
(EP)
7000 7730 8460 9910 11360
Levels 1 2 3 4 5
Index 2.57 2.57 2.57 2.57 2.57
1 18000 19900 21700 25500 29200
2 18500 20500 22400 26300 30100
3 19100 21100 23100 27100 31000
4 19700 21700 23800 27900 31900
5 20300 22400 24500 28700 32900
6 20900 23100 25200 29600 33900
7 21500 23800 26000 30500 34900

5.1.53 Annual Increment
Suppose, Ms. ABC, who, after having been fixed in the Pay Matrix, is drawing a Basic Pay of Rs.32,300 in Level 4. When she gets an annual
increment on 1st of July, she will just move one stage down in the same Level. Hence, after increment, her pay will be Rs.33,300.
Pay
Band
5200-20200
Grade
Pay
1800
1900
2000
2400
2800
Entry
Pay
(EP)
7000
7730
8460
9910
11360
Levels
1
2
3
4
5
Index
2.57
2.57
2.57
2.57
2.57
1
18000
19900
21700
25500
29200
2
18500
20500
22400
26300
30100
3
19100
21100
23100
27100
31000
4
19700
21700
23800
27900
31900
5
20300
22400
24500
28700
32900
6
20900
23100
25200
29600
33900
7
21500
23800
26000
30500
34900
8
22100
24500
26800
31400
35900
9
22800
25200
27600
32300
37000
10
23500
26000
28400
33300
38100
11
24200
26800
29300
34300
39200

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COMMENTS

WORDPRESS: 4
  • Sir, I am getting 4404 as basic pension from VI pay commission. I retired at 4590 in the time scale of 3050—4590, after rendering 23 years of serviceHow much I get in option 2 if the VII pay commission implements.

  • VINOD KUMAR CHIB 6 years ago

    Where is TABLE – 12A …?

  • This pay commission actually disappointed to civilian employees and it is the worst pay commission than earlier pay commission and 6cpc anomalies not yet resolved so far.

  • 10% increase in pension at the age of 65 instead of 80.