All about the 7th Pay Commission

The pay commission is a system by the Government of India which decides the wages of government employees and pensioners. Once in a decade, the central government determines a pay commission to re-evaluate the salaries of its employees such as the recent 7th pay commission.

Apart from salary revision, the pay commission also has terms of reference (ToR) for every commission released. The 7th pay commission’s ToR says that the salary of government employees and pensioners will be determined based on rationalisation of salary structure along with the needs of the department.

Who Is Covered Under the 7th Pay Commission

All the employees who are working for the government, pensioners, civil services, or receive payments from the Consolidated Fund of India are covered in 7th pay commission.

Following employee categories will come under 7th pay scale:

· All India Services Personnel.

· Non-industrial and industrial central government staff.

· Personnel belonging to the union territories of India.

· Accounts department and Indian audit officers and employees.

· Members that come under regulatory bodies of parliament acts; excluding the RBI.

· Supreme Court employees and other officers.

· Defence force personnel.

Things You Should Know About 7th Pay Commission

1. Minimum and Maximum Recommended Pay

Under the 7th pay commission, the minimum pay for entry-level will go up to INR 7,000 to 18,000 per month. The minimum payment will be INR 56,100 per month for Class 1 officers.

The apex position employees will receive an increased maximum payment of up to INR 2.25 Lakh to INR 2.5 Lakh.

2. 7th Pay Commission – Pay Matrix

A new pay matrix will be introduced after 7th pay commission considering the issues with the current grade pay. Now, the salary of the central government employees will not be determined through the grade pay but by the pay matrix.

3. New Structure for Pay

A new structure of pay has been introduced under the 7th pay scale but it only has existing levels. No new levels of the pay scale have been introduced.

4. Work-Related Illness and Injury Leave

Under work-related illness and injury leave (WRIIL) benefit of the pay commission, the employees who have suffered work-related injuries or illness will receive full pay. This will also include the allowance included in the pay.

5. Annual Increment

The annual increment was 3% per annum which has been retained under 7th pay scale as well. Hence, there is no change in the annual increment structure.

6. Dearness Allowance

The dearness allowance has now been increased by 2%, which will benefit around 50 lakh central government employees and 55 lakh other government employees and pensioners.

7. Military Service Pay

The military service pay is for the defence personnel of India. People who are in the Indian military services will receive MSP under 7th pay commission.

8. House Rent Allowance

In a bid to increase the basic pay of government employees, the 7th pay commission has increase HRA to 24%. It is further notified that when the dearness allowance increases by 50%, the HRA will also become 27%, 18%, and 9%. If the DA increases to 100%, the HRS will be 30%, 20%, and 10%.

9. Medical Changes

The 7th pay scale has additionally introduced health benefits for pensioners and employees of the central government. The pensioners not included in the Central Government Healthcare Scheme will also get cashless health benefits.

10. Advances

The 7th pay scale has removed non-interest advances and retained house building advance and personal computer advance. Additionally, the house building advance has been increased to INR 25 Lakh which was earlier only INR 7.5 Lakh.

11. Pension

For CAPF, civil employees, and defence personnel, the new 7th pay commission has suggested to revise and increase the pension. The pensioners are brought under the new pay matrix and their pension will become 2.57 times of the present pay after the revision.

12. Gratuity

Earlier, the gratuity was INR 10 lakh which has now been recommended to increase to INR 20 lakh. When the DA will cross 50%, the ceiling of gratuity will increase by 25%.

13. Modified Assured Career Progression

Since the government is looking forward to enhancing the functioning and working of employees, the MACP guidelines and benchmarks have been made strict. The employees will now be evaluated based on individual performance. The ‘Good’ level of earlier MACP has been changed to ‘Very Good’, and the other benchmarks have also become stringent. The employees with low performance will not receive promotions and increments.

14. Disability Pension for Armed Forces

Currently, a percentile-based system is being followed for the disability pension. With 7th pay commission, a slab-based system will be implemented for the disability pension.

Benefits and Drawbacks of 7th Pay Scale

There are some benefits and drawbacks of the 7th pay scale, which will affect the economy and GDP of the country. Let’s see what these are:


· Approximately, 1 crore employee will benefit if all the recommendations are cleared. These employees will receive a 23% increment in their pensions and salaries. This will increase expenditure and boost the GDP.

· The increased money will eventually enter the economic cycle and the government will get back 20% to 30% in the form of taxes.


· The new pay commissions often end up messing the finances of the government which will impact the GDP and take some time to get back to normal.

· Since the increment is not according to the potential of the employees, there is a huge gap in the increment structure of the public and private sector. The 7th pay scale increment should consider performance to increase productivity.

7th Pay Commission: Benefits for Employees

Every pay commission gets 18 months for offering recommendations and approval of the same. If the recommendations of 7th pay commission are finalised, the employees will enjoy 16% increased salary, pensioners’ payment will increase by up to 24%, and allowance will increase by 63% approximately. There are several other benefits associated to 7th pay scale such as the enhanced structure of HRA, health advantages, MACP, disability pension, gratuity, new pay matrix, dearness allowance, and max/min pay. Hence, employees as well as government both will benefit from this pay commission.

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Written by Shiv Shekar

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