7th Pay Commission Pay Structure, Pay fixation method and fitment
Formula – Grade Pay system dispensed with and new pay model by merging the
existing grade pay introduced
7th Pay Commission has evolved a new pay structure by merging the existing
grade pay with pay in pay band. Therefore Grade Pay system and pay band
Structure is dispensed with.
7th pay commission also mentioned that since grade pay computation by 6CPC varied greatly it is dispensed with.
New functional level pay model have been proposed 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.
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
7th Pay Commission has formulated fitment formula as far as existing
employees are concerned as 2.57. For instance, 7CPC pay of the employees
who are presently in the pay band of 5200 – 20200 with grade pay of Rs. 1800,
will be calculated by multiplying the factor of 2.57 with their existing basic
pay (pay in pay band + grade pay)
Grade pay and pay band wise fitment formula is as follows
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
|
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 of the 7th Pay Commission report.
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.
When the employee receives a promotion or a non-functional financial
upgrade, he/she progresses one level ahead on the horizontal range.
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.
The new pay matrix for university teachers is brought out below.
Minimum Pay
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 ₹26,000, which is around 3.7 times the existing minimum
salary of ₹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 pay at
₹18,000. Details on the computation of minimum pay have been brought out in
Chapter 4.2.
Fitment
The starting point for the first level of the matrix has been set at
₹18,000. This corresponds to the starting pay of ₹7,000, which is the beginning
of PB-1 viz., ₹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
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 to the 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.
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.
Source:
7th Pay Commission report