7th Central Pay Commission and the Arrears

The Pay Commission for Central Government employees is constituted once every ten years to revise their pay and allowances. The previous Pay Commission was implemented in the year 2006. The most recent one, the 7th Pay Commission, had submitted to the Central Government its report in 2015. The recommendations of the 7th Pay Commission are expected to come into effect from June or July this year. They are also very likely to have a retrospective effect from January 1, 2016 onwards.

In the event that it comes into effect from January 1, many are convinced that the government is very likely to not release the arrears for House Rent and Transport allowances, this time also. But, some of our readers vehemently oppose this stand.

The recommendations of 6th Pay Commission was implemented and the revised salaries were given only with effect from 01.01.2006. But the allowances are given only after 1.9.2008. It was originally meant to be implemented on January 1, 2006 including all allowances. The allowances, particularly HRA and TA were calculated from September 1, 2008 onwards. The government refused to give the 32-months arrears on HRA and Transport allowance.

This time, the slogan was “Pay Commission without arrears.” Despite it all, four months have passed. The government servants are not responsible for the delay, but they say that the government must pay the arrears on HRA and travel allowance this time from the implemented date.

This is why, in our 7th CPC Arrears Calculator, we have mentioned as two stages that the total approximate arrears and actual arrears.

Similarly, the readers have expressed their opinions about the various deductions, including CGEGIS, GPF, and NPS.

Some say that the arrear amount has to be calculated only after deducting the subscriptions of CGEGIS. And also, the arrear calculations must be made after deducting like Minimum GPF contributions and, the subscription of New Pension Scheme. We would like to state that we are making efforts to incorporate all these views. We would also like to thank our readers for giving us such wonderful and thought-provoking feedback.

The intention behind designing a calculator to find out the salaries, pensions and allowances of the Central Government employees, the serving members of the armed forces and the pensioners, is to give the readers a simple and as-accurate-as-possible method of calculation.

In the past, since the Pay Commission recommendations were enforced with years of retrospective effect, the government had refused to release the arrears for allowances

Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.



Economy - overview: India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged under 7% per year from 1997 to 2011. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the work force is in agriculture, but, services are the major source of economic growth, accounting for nearly two-thirds of India's output with less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. India's economic growth began slowing in 2011 because of a decline in investment, caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about the global situation. In late 2012, the Indian Government announced additional reforms and deficit reduction measures, including allowing higher levels of foreign participation in direct investment in the economy. The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Growth in 2013 fell to a decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account deficits. Rising macroeconomic imbalances in India and improving economic conditions in Western countries, led investors to shift capital away from India, prompting a sharp depreciation of the rupee. However, investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.
Source: CIA World Factbook - This page was last updated on June 30, 2015