The pay structure of employees of the central government is decided by the Pay Commission. Revisions are made keeping in mind parity of pay with other sectors as well as economic liabilities, both current and future.
The 7th Pay Commission has made several recommendations for changes that will have a far-reaching impact on the finances of the central government employees. Findhere are the top 7 revisions that you need to know about:
1. Changes in minimum and maximum salary
This may be the most exciting of all the changes made so far. Currently, Rs.7,000 is the minimum salary. This will increase to Rs.18,000. A newly recruited Class I officer will have Rs.56,100 as minimum salary. As far as maximum pay is concerned, this will depend on the grading and designation. Rs.2.25 lakh per month will be the maximum package for Apex scale government employees and Rs.2.5 lakh per month will be the maximum package for Cabinet secretary and grades that are similar.
2. Group insurance
There will be an increase in the Central Government Employees Group Insurance Scheme (CGEGIS) with revisions made as per the level or grade. Currently, for a monthly deduction of Rs.30, the insurance amount is Rs.30,000. Now the monthly deduction may increase to Rs.1,500 with a cumulative insurance of Rs.50,000.
3. Dearness Allowance
On Dearness Allowance, there may be a hike of 2% which will be an overall increase of 7% from 5%. This will affect current employees as well as pensioners.
There may be some advances, such as non-interest formats, which are discontinued with only some being retained. The most notable change will be in the House Building Advance, which will go up to Rs.25 lakh from the Rs.7 lakh that it is currently at.
The total gratuity sum can go up to Rs.20 lakh from the Rs.10 lakh that it is at currently. If the Dearness Allowance increases by 50%, then gratuity may increase by 25%.
6. Fitment factor
The suggested fitment factor is 2.58. This means that salaries that were implemented under the 6th Pay Commission will be multiplied by 2.58 across the spectrum of employees for the 7th Pay Commission.
7. Modified Assured Career Progression (MACP)
The MACP of an individual will be determined by his individual performance. This is to improve the productivity, motivation, and work output of the employees. There may be changes in the top performance bracket. There will also not be any promotions or annual increments for those employees who are performing below the expected performance parameters.
No doubt that these recommendations, if implemented, will make a major change in the pay structure and personal as well as family finances of central government employees. It will also affect a change in the way they perform at work, with a greater sense of ownership and responsibility being the aim of the Commission in making several of these changes. While there are many more revisions that will be made, these 7 are the ones that will have the most impact for now.