New Delhi: The government has taken decision to hike the basic pay only to neutralise the impact of increased financial burden which the ailing exchequer is going to face for implementing full 7th Pay Commission recommendations for central government employees now.
Finance Minister Arun Jaitley said, “the Cabinet will decide if the arrears have to be paid in one go or in installments.”
The government implemented the new pay structure for central government employees excluding allowances, the compensatory perks for all employees on Monday.
The new pay matrix is implemented in place of the pay band and grade pay as basic pay through thenotification and resolution of the 7th Pay Commission was issued by Finance Ministry on Monday, following which the employees will now get the revised pay from their August salaries.
A fitment factor of 2.57 will be applied across all levels in the pay matrices. After taking into account the DA at prevailing rate 125 per cent.
“With regard to fixation of pay of the employee in the new Pay Matrix as on 1st day of January, 2016, the existing pay (Pay in Pay Band plus Grade Pay) in the pre-revised structure as on 31st day of December, 2015 shall be multiplied by a factor of 2.57,” the notification says.
The recommendations on Allowances (except Dearness Allowance) will be referred to a Committee headed by Finance Secretary. The Committee will submit its report within a period of four months.
Till a final decision on Allowances is taken based on the recommendations of this Committee, all allowances will continue to be paid at existing rates in existing pay structure.
The Government has accepted the Commission’s recommendations on Minimum Pay Rs 18,000 per month, from existing Rs 7,000 per month, while maximum pay would hike up from Rs 90,000 a month to Rs 2.5 lakh.
There shall be two dates for grant of annual increment namely, 1st January and 1st July of every year, instead of existing date of 1st July; provided that an employee shall be entitled to only one annual increment on either one of these two dates depending on the date of appointment, promotion or grant of financial upgradation.
Dearness Allowance after coming into force of the revised Pay structure shall undergo change accordingly and will be linked to the average index as on January 1, 2016.
The Modified Assured Career Progression (MACP) scheme will continue to be administered at 10, 20 and 30 years of service as before. The benchmark for performance appraisal for MACP has been enhanced from Good to Very Good.
The annual increments will be withheld 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.
The arrears of hike in basic pay shall be paid during this financial year 2016-2017.
After cabinet approval for implementation of 7th Pay Commission recommendations, speaking at a press conference, Finance Minister Arun Jaitley said, “the Cabinet will decide if the arrears have to be paid in one go or in installments.”
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