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The 7th Pay Commission, which came into effect from 1 January 2016, brought about a major change in the salaries, allowances and pension of central government employees.
The 7th Pay Commission increased the lowest salary from ₹7,000 to ₹18,000 per month, benefiting lakhs of central government employees across various departments.
The maximum salary for secretary level officers of the Central Government has been revised to ₹2,25,000 per month under the 7th Pay Commission structure.
The old pay band and grade pay system was replaced by a new Pay Matrix, simplifying salary calculation and career progression.
Dearness Allowance (DA) is now revised twice a year to help employees offset the rising cost of living and inflation impact.
A fitment factor of 2.57 was applied, meaning new salaries are calculated by multiplying the previous salary by 2.57 times.
Pension reforms were introduced to enhance post-retirement financial stability for central government pensioners.
A compression ratio of 12.5 means the top salary (secretary-level) is 12.5 times the minimum salary, reducing income disparity.
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