Wednesday, 3 May 2017

Cabinet approves modifications in the 7th CPC recommendations on pay and pensionary benefits

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation. Earlier, in June, 2016, the Cabinet had approved implementation of the recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 (including arrears for 2 months of 2015-16).

The benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the Central Government is likely to be Rs.1,76,071 crore.  Some of the important decisions of the Cabinet are mentioned below:

1.        Revision of pension of pre – 2016 pensioners and family pensioners
The Cabinet approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet.  The modified formulation of pension revision approved by the Cabinet will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs.5031 crore for 2016-17 over and above the expenditure already incurred in revision of pension as per the second formulation based on fitment factor.  It will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.

While approving the implementation of the 7th CPC recommendations on 29th June, 2016, the Cabinet had approved the changed method of pension revision recommended by the 7th CPC for pre-2016 pensioners, comprising of two alternative formulations, subject to the feasibility of the first formulation which was to be examined by the Committee.

In terms of the Cabinet decision, pensions of pre-2016 pensioners were revised as per the second formulation multiplying existing pension by a fitment factor of 2.57, though the pensioners were to be given the option of choosing the more beneficial of the two formulations as per the 7th CPC recommendations.

In order to provide the more beneficial option to the pensioners, Cabinet has accepted the recommendations of the Committee, which has suggested revision of pension based on information contained in the Pension Payment Order (PPO) issued to every pensioner.  The revised procedure of fixation of notional pay is more scientific, rational and implementable in all the cases.  The Committee reached its findings based on an analysis of hundreds of live pension cases.  The modified formulation will be beneficial to more pensioners than the first formulation recommended by the 7th CPC, which was not found to be feasible to implement on account of non-availability of records in a large number of cases and was also found to be prone to several anomalies. 

2.         Disability Pension for Defence Pensioners

The Cabinet also approved the retention of percentage-based regime of disability pension implemented post 6th CPC, which the 7th CPC had recommended to be replaced by a slab-based system.
The issue of disability pension was referred to the National Anomaly Committee by the Ministry of Defence on account of the representation received from the Defence Forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees when compared to percentage-based disability pension. 

The decision which will benefit existing and future Defence pensioners would entail an additional expenditure of approximately Rs. 130 crore per annum.



  1. What is the rate of DP in slab system.

  2. Naginder singh parmar5 May 2017 at 00:36

    How does it effect pensioners??

  3. How much difference in basic pay we can expect

  4. Dear Sir,

    They should say that the Slab system or the Percentage system which ever is beneficial.
    For example: Hav- Gp- Y QS-20Yes now receiving DE 50%= 2151 in the % - present ,
    As per 7th PC- Slab system- 12000/2=6000
    But in % system now he will get= 2151 X 2.57=5528
    short fall of 472.
    For JCOs & ORs slab system will be beneficial.
    Sgt.S.Kanthiah, veteran, Exwel Trust.

    In t

  5. Calculation under the Option 3 for civilians is a straight forward exercise. Basic of 5CPC multiplied by 2.26 (???) and double it to arrive at the notional Pay of 6CPC. Multiplying it with 2.57 to get the Pay under 7CPC, and then select the nearest upper figure in the matrix for the group to arrive at the notional Pay under 7CPC. Half of it will be the Pension under 7CPC. But what about the OROP holders? Can anyone clarify further?

    1. Sir,
      5th CPC pay×2.26 and then double .wherefrom this calculation is picked up?
      While prefixing pay in 6th CPC MF of 1.86 was applied + grade pay as applicable.
      Even increments earned in 5 the CPC were bunched to half while prefixing in 6 the CPC
      PPO will not show the correct no of increments for those retired in6th CPC
      Unless the date of last promotion is endorsed in PPO it is always confusing to decide no of increments in last Rankin the basis of PPO presently
      I hope some learned esm could explain this

    2. Ref

    3. We can find out every thing provided the Govt is pro soldier.

  6. Till 2018 we Military pensioners must learn to live with OROP (Original) multiplied by 2.57. Then alone new parity with 2018 July pensioners will be given by the Modi government in June 2019. The OMJC Report might have gone to dustbin already.

    1. The EXSM are so ignorant that the pension amount presently arrived by OROP is only the maximum possible amount one can get.NO other system will fetch them a single rupee extra.IGNORANCE IS BLISS.This proverb is for us

  7. There is pay matrix table which is required to be referred while fixing pay from 6cpc to 7cpc in its respective pay level.Likewise there has to be pension matrix table which has not been provided as yet.I hope this is what called slab system. When PCDA Circular is issued in this regards all details will be available till then we may carry on speculation.