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Pre-2016 Pensioners & Disability Pension: Cabinet approves modification in the 7th CPC recommendations on pay and pensionary benefits

7th CPC Pension Committee Recommendations: Cabinet approves modification on pay and pensionary benefits

Press Information Bureau 
Government of India
03-May-2017 20:27 IST

Cabinet approves modifications in the 7th CPC recommendations on pay and pensionary benefits

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation. Earlier, in June, 2016, the Cabinet had approved implementation of the recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 (including arrears for 2 months of 2015-16).
The benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the Central Government is likely to be Rs.1,76,071 crore. Some of the important decisions of the Cabinet are mentioned below:

1. Revision of pension of pre – 2016 pensioners and family pensioners

The Cabinet approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet. The modified formulation of pension revision approved by the Cabinet will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs.5031 crore for 2016-17 over and above the expenditure already incurred in revision of pension as per the second formulation based on fitment factor. It will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.
While approving the implementation of the 7th CPC recommendations on 29th June, 2016, the Cabinet had approved the changed method of pension revision recommended by the 7th CPC for pre-2016 pensioners, comprising of two alternative formulations, subject to the feasibility of the first formulation which was to be examined by the Committee.
In terms of the Cabinet decision, pensions of pre-2016 pensioners were revised as per the second formulation multiplying existing pension by a fitment factor of 2.57, though the pensioners were to be given the option of choosing the more beneficial of the two formulations as per the 7th CPC recommendations.
In order to provide the more beneficial option to the pensioners, Cabinet has accepted the recommendations of the Committee, which has suggested revision of pension based on information contained in the Pension Payment Order (PPO) issued to every pensioner. The revised procedure of fixation of notional pay is more scientific, rational and implementable in all the cases. The Committee reached its findings based on an analysis of hundreds of live pension cases. The modified formulation will be beneficial to more pensioners than the first formulation recommended by the 7th CPC, which was not found to be feasible to implement on account of non-availability of records in a large number of cases and was also found to be prone to several anomalies. 

2. Disability Pension for Defence Pensioners

The Cabinet also approved the retention of percentage-based regime of disability pension implemented post 6th CPC, which the 7th CPC had recommended to be replaced by a slab-based system.
The issue of disability pension was referred to the National Anomaly Committee by the Ministry of Defence on account of the representation received from the Defence Forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees when compared to percentage-based disability pension. 
The decision which will benefit existing and future Defence pensioners would entail an additional expenditure of approximately Rs. 130 crore per annum.



  • Sir cabinet has aproved retaining percentage basis for disability pension but so far pcda has noot issued any order for payoment of the z

  • I am of the firm opinion that the BJP Government at the top can not but rope in the support of the employees those who are in service and those who are retired and the family members attached to them so as to face the next general election. Accordingly the Government would fix the pension of the retirees in conformity with the new scale corresponding to the cadre and stage from which they retired. Suppose if a person has retired in the 13th stage in the 6th pay commission pay or earlier in the 5th pay commission pay, his basic pay would be worked out based on the 13th stage in the new pay scale and pension granted accordingly. That is what I infer from the Cabinet decision. Though it would be less than option 1, it would definitely be more than option 2.

  • This 3rd formula denies the due benefits recommended by pay commission. Fully aware of the fact that it can be implemented without any hitch, the IAS lobby and the present government has taken a stand that the first method recommended by commission is not implementable and decided for new formula. This causes much loss to many pre-2016 pensioners. This is more sadistic and against all cannons of welfare government. Hope truth dawn's early

  • Notional pay may be fixed by multiplying the basic pay in PPO by 2,57. then that pay may be fixed in the corresponding scale in 7th pay Commission matrix table.

  • Do we get satisfactorily answers? Or we shall keep on only questioning?
    If, anybody has a reply, Pl. Post it.if yes, then it is to understand the effectiveness of

  • Umrao Chalasani 6 years ago

    The way little benefits are being doled out to pensioners, I don't expect much benefit from the new scheme. More scientific, rational and implementable…..? Pl give us an example for pre-1996 pensioners

  • Sir, how the new method will calculate pension in respect of an employee who retired with one increment in the last grade and with more than one increment of an employee in the same grade- M.N.Anjiah, Advocate (central Govt. pensioner)

  • bc goyalmhow 6 years ago

    For disability pension, percentage system has been retained and slab system has been discarded, which is more fair and logical

  • bc goyalmhow 6 years ago

    good move by the cabinet lets wait for details

  • My question is same as Mr.Basak's. And then how the "notional pay" will be calculated? What is the formula? I couldn't find it anywhere so far.

  • The revised procedure of fixation of notional pay is more scientific, rational and implementable in all the cases. Under this procedure will the pension of a particular person who has retired before 2016 at the top most basic pay of a particular designation will be same as a person retiring after 2016 in the revised pay scale and holding the same designation at the top most basic pay ?

    • Your presumption is absolutely correct. Any deviation will inevitably lead to litigation knocking the doors of the court of law and our Honourable Finance Minister himself a leading legal luminary can not afford to allow pension matters being taken up to the courts for adjudication.


    Slab system of Disability pension has been approved. But the rates are not revised. The 7the cpc recommend is too low