7th Pay Commission Latest News – Increase in Basic Pay meagre but expected gains out of other compensation, a solace

7th Pay Commission Latest News – Increase in Basic pay of 14.22% which is lowest increase out of any Pay Commission  – However, certain Positive Aspects of Recommendations made in the 7th CPC Report mainly in the areas of Central Government Employees Welfare measures and Retirement Schemes may be solace to Central Government Employees

After a long wait of 10 years, Basic Pay of Central Government Employees has been proposed for an increase of 14.22%.  In any standards, this quantum of increase can not be justified to be adequate.  In fact this is the lowest increase out of any pay commission constituted in India so far.  Let’s wait and see whether Empowered Committee formed by the Govt to process the present pay commission report make any positive changes to it.

Though 7th Pay Commission report failed to convince Central Government Employees in pay and allowances front, there are certain positive aspects in the recommendations which mainly relate to welfare measures, compensation and Retirement benefits. In the following paragraphs we would be discussing those which might surely improve overall Compensation package of central government employees in the long run.

7th Pay Commission’s decision to retain CPI-IW with base Year 2001=100 for determining Dear Allowance rate:

As demanded by various Central Govenment Employees Federations 7th CPC has proposed for retaining All India Consumer Price Index (Industrial Workers) with base year 2001=100. This means the allowance offered by govt to compensate inflation would continue to be calculated in the same as it is done presently, after deducting the quantum of DA (@ 125% for 126%) that is to be merged with pre-revised pay.
Dearness Allowance with effect from 1st January 2016 =[ (Avg of AICPI for the period from January 2015 to December 2015 – 115.76)*100/115.76] – 125 (or) 126
Interestingly, the earlier Pay Commission (6CPC) had proposed for adopting to new series of index (CPI-IW with base year 2001=100) which was later accepted by Govt. This measure needed adjustment in the calculation formula in respect of dearness allowance with effect from 1st January 2006 in the form of linking factor of 4.63 between base year 1982=100 and 2001=100