7th Pay Commission Rumours – Discarding Grade Pay system – Will it be beneficial ?
Fitment benefit in the form of Grade Pay provided by 6th CPC was computed based on highest pre-revised pay in each of the pre-revised Pay Scale – Fitment benefit advocated by previous pay commisions were reckoned with Pre-revised basic Pay drawn on the effective date of CPC
While Central Government Employees keep their fingers crossed after 7th Pay Commission finished all the interaction sessions with the Employees Federations and started finalising its report to be submitted to Govt, many surmises and speculations have already started filling the air through Internet and through word of mouth about possible 7th CPC pay fixation methods.
Some of those 7th Pay Commission rumours are as follows
- There will be no running Pay band and Grade Pay System
- The Minimum Pay will be Rs. 21000
- The uniform multiplication factor for arriving revised pay will be 2.86
- The Criteria for retirement age will be either completion of 33 Years of service or at the age of 60 Years whichever is earlier.
Interestingly, these rumours are spread out this time carry the tags as “inside information provided by Employees federations which participated in the 7th Pay Commission meetings”. The very character of a rumour is, it may be true or false. God only knows.
Among these, the unconfirmed news that 7th Pay Commission is to discard Pay Band – Grade Pay System may be affecting the Pay Structure of Central Government Employees very much if it is true.
In fact this is an off-shoot of proposal moot out by Confederation of Central Government Employees and Workers in its reply to 7th Pay Commission Questionnaire
Click here to read Confederation’s reply to 7th Pay Commission Questionnaire
In this background, we made an analysis as to whether discarding of Grade Pay System would be beneficial to Central Government Employees.
As per the proposal of Confederation, the Pay Band and Grade Pay system evolved by the 6th CPC brought about innumerable anomalies and the same has to be replaced by the Pay scale structure, which was in vogue prior to the implementation of the 6th CPC.
What was Pay Scale Structure prior to 6th CPC ? How fixation pay was made in that pay scale ?
Obviously, Pay Scale Structure contemplated by Confederation is 5th Pay Commission Pay Structure which is the Pay Structure prior to 6th CPC pay Structure.
Now, let us have a look at the 5th CPC Pay Structure and how pre-revised 4th CPC Pay was revised and fit into the same.
5th Pay Commission Pay fixation Method :
As per Central Civil Services (Revised Pay) Rules 1997 which was notified by Ministry of Finance for implementation of 5th Pay Commission Report, Revised Pay Scales against 4th CPC pay scales are as follows
| 4th CPC Pay scales | 5th CPC pay scales | |
| 750-12-870-14-940 | S-1 | 2550-55-2660-60-3200 |
| 775-12-871-12-1025 | S-2 | 2610-60-3150-65-3540 |
| 775-12871-14-955-15-1030-20-1150 | S-2A | 2610-60-2910-65-3300-70-4000 |
| 800-15-1010-20-1150 | S-3 | 2650-65-3300-70-4000 |
| 825-15-900-20-1200 | S-4 | 2750-70-3800-75-4400 |
| 950-20-1150-25-1400/950-20-1150-25-1500/1150-25-1500 | S-5 | 3050-75-3950-80-4590 |
| 975-25-1150-30-1540/975-25-1150-30-1660 | S-6 | 3200-85-4900 |
| 1200-30-1440-30-1800/1200-30-1560-40-2040/1320-30-1560-40-2040 | S-7 | 4000-100-6000 |
| 1350-30-1440-40-1800-50-2200/1400-40-1800-50-2300 | S-8 | 4500-125-7000 |
| 1400-40-1600-50-2300-60-2600/1600-50-2300-60-2660 | S-9 | 5000-150-8000 |
| 1640-60-2600-75-2900 | S-10 | 5500-175-9000 |
| 2000-60-2120 | S-11 | 6500-200-6900 |
| 2000-60-2300-75-3200/2000-60-2300-75-3200-3500 | S-12 | 6500-200-10500 |
| 2375-75-3200-100-3500 / 2375-75-3200-100-3500-125-3750 | S-13 | 7450-225-11500 |
| 2500-4000 | S-14 | 7500-250-12000 |
| 2200-75-2800-100-4000/2300-100-2800 | S-15 | 8000-275-13500 |
| 2200-75-2800-100-4000 | NEW SCALE | 8000-275-13500(Group A Entry) |
| 2630/- FIXED | S-16 | 9000 |
| 2630-75-2780 | S-17 | 9000-275-9550 |
| 3150-100-3350 | S-18 | 10325-325-10975 |
| 3000-125-3625/3000-100-3500-125-4500/ 3000-100-3500-125-5000 | S-19 | 10000-325-15200 |
| 3200-100-3700-125-4700 | S-20 | 10650-325-15850 |
| 3700-150-4450/3700-125-4700-150-5000 | S-21 | 12000-375-16500 |
| 3950-125-4700-150-5000 | S-22 | 12750-375-16500 |
| 3700-125-4950-150-5700 | S-23 | 12000-375-18000 |
| 4100-125-4850-150-5300/4500-150-5700 | S-24 | 14300-400-18300 |
| 4800-150-5700 | S-25 | 15100-400-18300 |
| 5100-150-5700/5100-150-6150/5100-150-5700
-200-6300 |
S-26 | 16400-450-20000 |
| 5100-150-6300-200-6700 | S-27 | 16400-450-20900 |
| 4500-150-5700-200-7300 | S-28 | 14300-450-22400 |
| 5900-200-6700/5900-200-7300 | S-29 | 18400-500-22400 |
| 7300-100-7600 | S-30 | 22400-525-24500 |
| 7300-200-7500-250-8000 | S-31 | 22400-600-26000 |
| 7600/-FIXED /7600-100-8000 | S-32 | 24050-650-26000 |
| 8000/- FIXED | S-33 | 26000(FIXED) |
| 9000/- FIXED | S-34 | 30000(FIXED) |
Further, 5th CPC revised pay of Central Government Employees was worked out by adding DA as on 01.01.1996, two installments of Interim Relief (IR-1 and IR-2) and 40% of pre-revised basic pay with Pre-Revised Basic pay drawn as on 01.01.1996. Then resultant revised basic pay was stepped up to nearest incremented pay in the revised 5th CPC pay scale against the existing 4th CPC pay scale in which the pay was drawn. The following illustration would provide clear cut idea about 5th Pay Commission Pay fixation method
Illustration for 5th Pay Commission Pay fixation
| Existing 4th CPC pay scale | Rs. 1640-60-2600-75-2900 |
| Revised 5th CPC pay scale | Rs. 5500-175-9000 |
| Pre-Revised Basic Pay | Rs. 2360 |
| D.A as on 01.01.1996 @ 148% | Rs. 3493 |
| IR-1 | Rs. 100 |
| IR-2 | Rs. 236 |
| Add 40% of pre-revised B.P | Rs. 944 |
| Total | Rs. 7133 |
| Nearest incremented pay in revised 5th CPC pay scale —-A | Rs, 7250 |
| If one increment is ensured in the revised pay scale for every three increments in the pre-revised pay scale, the revised basic will be —- B | Rs. 6250 |
| 5th CPC revised Basic Pay as on 01.01.1996 (A or B whichever is higher) | Rs. 7250 |
From the above it could be found that fitment benefit of 40% is calculated using the pre-revised basic pay received by an employee as on 01.01.1997. On the contrary, in the case of fitment benefit allowed by 6th Pay Commission in the form of Grade Pay, it has been calculated at 40% of highest Pay in each of 5th CPC Pre-Revised pay scale.
6th Pay Commission Pay Band and Grade Pay hierarchy
| 5th CPC Pay Scales | 6th CPC Pay Band and Grade Pay | |||
| GRADE | SCALE | Pay Band | Grade Pay | |
| S-1 | 2550-55-2660-60-3200 | -1S | 4440-7440 | 1300 |
| S-2 | 2610-60-3150-65-3540 | -1S | 4440-7440 | 1400 |
| S-2A | 2610-60-2910-65-3300-70-4000 | -1S | 4440-7440 | 1600 |
| S-3 | 2650-65-3300-70-4000 | -1S | 4440-7440 | 1650 |
| S-4 | 2750-70-3800-75-4400 | PB-1 | 5200-20200 | 1800 |
| S-5 | 3050-75-3950-80-4590 | PB-1 | 5200-20200 | 1900 |
| S-6 | 3200-85-4900 | PB-1 | 5200-20200 | 2000 |
| S-7 | 4000-100-6000 | PB-1 | 5200-20200 | 2400 |
| S-8 | 4500-125-7000 | PB-1 | 5200-20200 | 2800 |
| S-9 | 5000-150-8000 | PB-2 | 9300-34800 | 4200 |
| S-10 | 5500-175-9000 | PB-2 | 9300-34800 | 4200 |
| S-11 | 6500-200-6900 | PB-2 | 9300-34800 | 4200 |
| S-12 | 6500-200-10500 | PB-2 | 9300-34800 | 4200 |
| S-13 | 7450-225-11500 | PB-2 | 9300-34800 | 4600 |
| S-14 | 7500-250-12000 | PB-2 | 9300-34800 | 4800 |
| S-15 | 8000-275-13500 | PB-2 | 9300-34800 | 5400 |
| NEW SCALE | 8000-275-13500(Group A Entry) | PB-3 | 15600-39100 | 5400 |
| S-16 | 9000 | PB-3 | 15600-39100 | 5400 |
| S-17 | 9000-275-9550 | PB-3 | 15600-39100 | 5400 |
| S-18 | 10325-325-10975 | PB-3 | 15600-39100 | 6600 |
| S-19 | 10000-325-15200 | PB-3 | 15600-39100 | 6600 |
| S-20 | 10650-325-15850 | PB-3 | 15600-39100 | 6600 |
| S-21 | 12000-375-16500 | PB-3 | 15600-39100 | 7600 |
| S-22 | 12750-375-16500 | PB-3 | 15600-39100 | 7600 |
| S-23 | 12000-375-18000 | PB-3 | 15600-39100 | 7600 |
| S-24 | 14300-400-18300 | PB-4 | 37400-67000 | 8700 |
| S-25 | 15100-400-18300 | PB-4 | 37400-67000 | 8700 |
| S-26 | 16400-450-20000 | PB-4 | 37400-67000 | 8900 |
| S-27 | 16400-450-20900 | PB-4 | 37400-67000 | 8900 |
| S-28 | 14300-450-22400 | PB-4 | 37400-67000 | 10000 |
| S-29 | 18400-500-22400 | PB-4 | 37400-67000 | 10000 |
| S-30 | 22400-525-24500 | PB-4 | 37400-67000 | 12000 |
| S-31 | 22400-600-26000 | HAG+SCALE | 75500-80000 | NIL |
| S-32 | 24050-650-26000 | HAG+SCALE | 75500-80000 | NIL |
| S-33 | 26000(FIXED) | APEX SCALE | 80000(FIXED) | NIL |
| S-34 | 30000(FIXED) | CAB. SEC. | 90000(FIXED) | NIL |
We are of the view that if the 7th CPC fitment benefit is calculated on the basis of existing pre-revised pay as in the case of 5th CPC then revised 7th CPC pay would be lesser than the revised 7th CPC Pay calculated by adopting the methods 6th CPC, in which grade pay (fitment benefit) has been arrived at on the basis of highest pay in the pre-revised pay Scale.
At the same time it may not be viable to arrive 7th CPC fitment benefit on the basis of highest Pay in each of Pay Band as 6th CPC Pay Band Structure has been designed in such a way that each of the Pay band accommodates many 5th CPC Pre-Revised Pay Scales
However, even after discarding Grade pay System, if the fitment benefit for 7th Pay Commission Pay revision is provided on the basis of highest pay in the fitment table provided vide O.M 1/1/2008-IC dated 30.08.2008 for the each of the 5th CPC Pre-Revised Pay Scale, then it would be Pay wise beneficial to Central Governement Employees.
We invite valuable opinion of readers in the form of comments to this article so that pay fixation method beneficial to CG Employees community can be highlighted
The 40% system (of higher pay of every 5th CPC scale) adopted by 6th CPC as fitment is only to be construed as a transitional or short cut method to migrate to pay band system from pay scale system. But my contention is that even this system was not uniformally applied across all pay scales. Considering the pay scale system the pay band system has many advantages like easy pay fixation, removal of stagnation. etc. It has its own anomalies too. anomalies are bound to happen when you move from one system to another system. The anomalies are mainly related to MACP and merger of few pay scales. What is needed is rectification of these anomalies once for all. The progression of existing Grade pay from Rs.1900/- to Rs.10,000/- is not uniform. Some stage it is high and some stage is very low. This is because the pay band system still retain its connection with old pay scale system ( due to 40% fitment adoption from that scale). You need to ensure uniformally increasing Grade pay from bottom to top, appropriate incremental increase in band pay yearly, and method of pay fixation or promotion which will ensure decent/uniform increase in pay on promotion. Once pay bands and Grade pay are properly re arranged, what we need is permanent formula of revision of pay scale and fixation method to switch over to new pay scale every 10th year. This formula should contain flexible variables which can be reviewed from time to time as per paying capacity. Whatever formula you follow, it is within the overall payment capacity. We do not need a pay commission to merge DA and form new pay scale. Instead of pay commission we need job evaluation commission, which will continuously review designation, EQ, method of recruitment and pay scale applicable for a particular post based on its job profile.
I agree with Mr. Parameswaran P A. He has defined the pay commission system in a simple way. Instead of pay commission we should have job evaluation system, one more thing I would like to add is that the employees who donot deserve the higher posts shalll not be promoted even if they pass the departmental exams or reaches the seniority level, criteria should be like performance on the lower post and respective departmental knowledge. To be honest all Government departments are overloaded with staff with mere accountability- it should be checked out.
A. YOUR ARTICLE HAS PROJECTED A VERY TRUE PICTURE WHICH WOULD BE INFORMATIVE TO ALL THE CENTRAL GOVERNMENT EMPLOYEES. RETAINING GRADE PAY IS VERY MUCH BENEFICIAL IN THE CASE OF PROMOTION BECAUSE THE EMPLOYEE GETS 3% INCREMENT ON HIS PRE-PROMOTED PAY AND GRADE PAY AND ALSO GET ADVANTAGE OF INCREASE IN THE DIFFERENCE OF GRADE PAY OF THE PROMOTED POST. WHEREAS PAY FIXATION ON PROMOTION UNDER V CPC WAS NOT BENEFICIAL BECAUSE ONE INCREMENT WAS GIVEN IN THE OLD SCALE PRIOR TO PROMOTION AND FIXATION DONE TO THE NEXT NEAREST INCREMENT SLAB THE BENEFIT OF WHICH HAD BEEN ONLY MARGINAL IN MOST OF THE CASES. HAD THE VI PAY MERGED THE FITMENT BENEFIT IN THE BASIC PAY ITSELF INSTEAD OF SHOWING DISTINCTLY AS GRADE PAY, THE 3% INCREASE ON THE MERGED FITMENT BENEFIT WOULD HAVE BEEN VERY LESS THAN THE DIFFERENCE BETWEEN ONE GRADE PAY AND ANOTHER GRADE PAY. FOR EXAMPLE HAD THE FITMENT BENEFIT OF RS.5400 FOR GROUP A WAS MERGED IN THE PAY OF RS. 15600 THE 3% INCREMENT ON THE REVISED BASIC PAY OF RS. 21000 WOULD HAVE BEEN JUST RS.630 IN CASE OF PROMOTION TO THE NEXT POST (IN THIS THE 3% EXCLUSIVELY ON THE MERGED FITMENT BENEFIT OF RS.5400 WILL BE JUST RS.162/-) . WHERE AS THE DIFFERENCE BETWEEN GRADE PAY OF RS.5400 AND THE NEXT GRADE PAY OF RS. 6600 IS RS.1200/- PLUS 3% OF RS. 630 TOTALING TO RS.1830/- WHICH IS HIGHLY BENEFICIAL. THEREFORE GRADE PAY SYSTEM SHOULD BE RETAINED ENSURING INCREASE BETWEEN ONE GRADE PAY TO OTHER GRADE PAY OF THE PROMOTED POST.
B.THE PAY BAND SYSTEM ABRIDGING THE PRE-REVISED V CPC 42 SCALES INTO A FEW BROADER PAY BANDS IS TO BE TOTALLY DISCARDED AS IT IS OF NO USE AT ALL AND HAS RESULTED IN ANOMALIES BETWEEN PROMOTEES AND DIRECT RECRUITS.
You are right in saying that 40% fitment benefit cannot be applied on the present 6th CPC pay structure. However, without necessarily having to discard the grade pay system, the multiplication factor of 2.20 could be applied first on the total pay (band pay + grade pay + DA) minus grade pay and then the multiplication factor could be applied separately on the grade pay. That way, it appears a decent pay structure could be arrived at by merging certain grade pays such as 1900 and 2000 into 2400; and 4600 and 4800 into 5400. PB-1 will have 3 grade pays 1800, 2400 and 2800. PB-2 will have 2 grade pays 4200 and 5400. PB-3 will have 2 grade pays 6600 and 7600. PB-4 will have 3 grade pays 8700, 10000 and 12000/- Apex pay remains undisturbed. Now, if each of such merged grade pays are multiplied by uniform multiplication factor of 2.20, we get PB-1:- 4000, 5300 and 6200; PB-2:- 9300 and 12000; PB-3:- 14500 and 16700; PB-4:- 19200, 22000 and 26500. Eg: Pay of a new recruit in the PB-1 could thus be: Band Pay+ Grade pay + DA => (5200+1800+ 7910)-1800 => 13110 x 2.2=28850; Plus Grade pay=>1800 x 2.2 = 4000. Thus the PB-1 entry level pay would be 28850+4000. While the highest pay in the central govt could be 198000. This is in the ratio of bottom:top=1:6 which is a very healthy ratio in terms of bridging gap between the least paid to the highest paid.
Exlent