Pay Commission is set up intermittently by government of India, and gives its recommendations regarding changes in salary structure of its employees.
Since India’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 date of its constitution to make its recommendations
The first pay commission was established on January , 1946 and its submitted its report on May, 1947 to the interim government of India. It was under the chairmanship of Srinivasa Varadachariar.
Seventh Pay Commission
The Government of India initiated the process to constitute the 7th Central Pay Commission along with finalization of its Terms of Reference, the composition and the possible timeframe for submission of its Report on September 25, 2013. Its recommendations are likely to be implemented with effect from January 1, 2016. Justice A.K Mathur will be heading the Seventh Pay Commission, announcement of which was done on 4 February 2014.
Salary increment 7th Pay panel suggests
23.55% hike in pay and allowances of govt employees. Pay will go up by 16%; increase in allowances will be 63%;
Increase in pension will be 24%.
Minimum basic pay for central govt staff recommended at Rs 18,000
Maximum pay Rs 2.25 lakh per month
Pay Commission recommends 3% annual increment and 24% hike in pension for central government staffers.
Financial burden Seventh pay commission will definitely bring a toll on the exchequer The reason being Government has to manage OROP’s expenditures too. FY17 impact seen at Rs 1.02 lakh crore from implementation of the 7th Pay Commission.
Total impact from implementation of 7th Pay Commission is Rs 1.02 lakh cr; including Rs 28,000 Cr
Implementation of 7th Pay Commission to impact fiscal deficit by 0.65%
Past pay commissions and the minimum basic salary– First pay commission came in year 1946 and the basic salary at that time was decided to be of Rs 35 Second pay commission came in year 1959 and basic salary was of Rs 80 In 1973, third pay commission came into effect which decided the basic salary of Rs 185 Fourth pay commission came in year 1986 which recommend basic salary of Rs 750 In year 1996, fifth pay commission came, recommending basic salary of Rs 2550 Sixth pay commission came into effect in year 2006. UPA Government at that time fixed minimum basic salary of Rs 6660