7th Pay Commission New Pay Structure
7th pay commission recommended New Pay Metrix instead of Pay structure
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 Table 3 below brings out the new dispensation for various grades pay pertaining to Civil, Defence and MNS.
5.1.13 Although the VI CPC had mentioned that grade pay would be equivalent to 40 percent of the maximum of the pre-revised scale and that the grade pay will constitute the actual fitment, yet the computation varied greatly. After the implementation of recommendations, the difference became more pronounced in Pay Band 4 as compared to the other three pay bands. This resulted in varying fitment factors for various levels and promotional benefits that were perceived to be rather differentiated. The same pattern was discernible in the pension fixation too.
5.1.14 After analysing the issues brought out by various stakeholders, this Commission is suggesting a new pay model that is expected to not only address the existing problems but will also establish a rationalised system which is transparent and simple to use.
5.1.15 To begin with, the system of Pay Bands and Grade Pay has been dispensed with and the new functional levels being proposed have been arrived at 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.
5.1.16 The pay structures in vogue, by way of pay scales or pay bands, indicate the definite boundaries within which the pay of an individual could lie. It is however difficult to ascertain the exact pay of an individual at any given point of time. Further, the way the pay progression would fan out over a period of time was also not evident. Since various cadres are designed differently the relative pay progression also varies. The Commission believes that any new entrant to a service would wish to be able to make a reasonable and informed assessment of how his/her career path would traverse and how the emoluments will progress alongside. The new pay structure has been devised in the form of a pay matrix to provide complete transparency regarding pay progression.
5.1.17 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 Table 3 below brings out the new dispensation for various grades pay pertaining to Civil, Defence and MNS.
5.1.18 Prior to VI CPC, there were Pay Scales. The VI CPC had recommended running Pay Bands with Grade Pay as status determiner. The Seventh CPC is recommending a Pay matrix with distinct Pay Levels. The Level would henceforth be the status determiner.
5.1.19 Since the existing pay bands cover specific groups of employees such as PB-1 for Group `C’ employees, PB-2 for Group `B’ employees and PB-3 onwards for Group `A’ employees, any promotion from one pay band to another is akin to movement from one group to the other. These are significant jumps in the career hierarchy in the Government of India. Rationalisation has been done to ensure that the quantum of jump, in financial terms, between these pay bands is reasonable. This has been achieved by applying ‘index of rationalisation’ from PB-2 onwards on the premise that with enhancement of levels from Pay Band 1 to 2, 2 to 3 and onwards, the role, responsibility and accountability increases at each step in the hierarchy. The proposed pay structure reflects the same principle. Hence, the existing entry pay at each level corresponding to successive grades pay in each pay band, from PB-2 onwards, has been enhanced by an ‘index of rationalisation’ as shown below in Table 4:
5.1.20 While a carefully calibrated gradation has been adopted as the levels progress upwards, it would be seen that two levels, corresponding to GP 8700 and GP 10000 witness a slight departure.
i. In the existing system there is a disproportionate increase in entry pay at the level pertaining to GP 8700. To address this, the proposed increase at this level has been moderated.
ii. In so far as GP 10000 is concerned, this represents the Senior Administrative Grade, which carries a significantly higher degree of responsibility and accountability. Further, the levels of SAG and above are those which are involved in policy formulation.
iii. Hence, in recognition of the same, the entry pay pertaining to GP 10000 as well as that of HAG and HAG+ has been enhanced by a multiple of 2.72.
iv. The Apex pay of Secretary/equivalent and pay of Cabinet Secretary/equivalent has been fixed by applying indices of 2.81 and 2.78 respectively. The rationalised entry pay so arrived has been used in devising the new pay matrix.
5.1.21 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.
5.1.22 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.
5.1.23 When the employee receives a promotion or a non-functional financial upgrade, he/she progresses one level ahead on the horizontal range.
5.1.24 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.
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