CPC Examined 197 allowances- Need for continuation, appropriateness, and rationalization.
53 allowances abolished
37 subsumed
Raises
Raised commensurate with inflation as reflected in the rates of Dearness Allowance (DA) .
DA-indexed allowances such as Transport Allowance not given any raise
Allowances not indexed to DA raised by 2.25
Partially indexed by factor of 1.5.
Quantum of allowances as a percentage of pay rationalized by a factor of 0.8.
New table called the Risk and Hardship Matrix (R&H Matrix)
Nine cells denoting degrees of risk and hardship
Extra cell at the top named as RH - Max includes Siachen Allowance.
Multiple rates replaced by two slab rates for every cell of the R&H Matrix.
Financial Implications
Combined additional financial implication estimated at ₹ 30748.23 crore per annum.
House Rent Allowance
Current:
30% for X (population of 50 lakh & above)
20% for Y (5 to 50 lakh)
10% for Z (below 5 lakh)
New:
24% for X
16% for Y
8% for Z
HRA shall not be less than ₹ 5400, ₹ 3600, and ₹ 1800 for X, Y and Z category of cities calculated@30% , 20% and 10% of the minimum pay of ₹ 18000
Siachen Allowance
Placed Siachen Allowance in the RH-Max cell of the R&H Matrix.
Enhance the rates of Siachen Allowance to ₹ 30,000 per month for Jawans & JCOs (Level 8 and below) and ₹ 42,500 per month for Officers (Level 9 and above) .
Tough Location Allowance
Based on geographical location such as Special Compensatory (Remote Locality) Allowance (SCRLA) , Sunderban Allowance & Tribal Area Allowance subsumed in Tough Location Allowance.
Areas under TLA classified into three categories
Rates governed per different cells of R&H Matrix
Range of ₹ 1000 - ₹ 5300 per month
About Pay Commission
Set up intermittently
Recommends changes in salary structure GoI employees
The pay commission is an administrative system⟋mechanism that the government of India set up in 1956 to determine the salaries of government employees.
Since lndia՚s independence, seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the government of India.
Headquartered in Delhi, the commission is given 18 months from the date of its constitution to make its recommendations.
First Pay Commission:
The first pay commission was established on January, 1946 and was submitted to interim government of India.
Headed by Srinivasa Varadachariar.
Second Pay Commission:
The second pay commission was set up in August 1957,10 years after independence.
The second pay commission had a financial impact of ₹ 396 million.
Chairman of the commission was Jagannath Das.
Third Pay Commission:
The third pay commission set up in April 1970.
The cost of the proposals was 1.44 billion
Chairman was Raghubir Dayal.
The third pay commission (3Cm) added three very important concepts of Inclusiveness, Comprehensibility, an adequacy for pay structure to be sound in nature.
Fourth Pay Commission:
Constituted in June 1983.
The financial burden on government was 12.82 billion.
Chairman of fourth pay commission was P. N. Singhal.
Fifth Pay Commission:
Setting up the Fifth pay Commission was issued on 9 April 1994 but started functioning only on 2 May 1994.
Chairman of Fifth pay commission was Justice S. Ratnavel Pandian.
Sixth Pay Commission:
In July 2006, the cabinet approved setting up of the sixth pay commission.
Chairman was Justice B. N. Sri Krishna.
Focus mainly on removing ambiguity in respect of various pay scales and to bring the idea of pay bands.
Justice A. K Mathur headed the Seventh Pay Commission
Table contain shows the Justice A. K Mathur headed the Seventh Pay Commission
Name
Designation
Role in Commission
Ashok Kumar Mathur
Retired Judge, Supreme Court and Retired Chairman, Armed Forces Tribunal
Chairman
Vivek Rae
Retd. Secretary, Ministry of Petroleum and Natural Gas
Member (Full Time)
Dr. Rathin Roy
Director, NIPFP
Member (Part Time)
Meena Agarwal
OSD, Department of Expenditure, Ministry of Finance