8th Pay Commission: Why it won't be a surprise if 8th CPC changes the pay model, 7th CPC did it too

Amid the wait for the notification of the terms of reference for the 8th CPC, central government employees may benefit by knowing why and how the 7th CPC changed the pay model. This will help them not feel surprised if the 8th Pay Commission also follows the past trend and changes the existing pay model based on the recommendations of the 7th Pay Commission.

Let's see why and how the 7th CPC changed the pay model:

In its report, the 7th CPC noted that the 6th Pay Commission had mentioned that grade pay would be equivalent to 40% of the maximum of the pre-revised scale and that the grade pay will constitute the actual fitment. However, the computation varied greatly.

In fact, after the implementation of the 6th CPC's recommendations, the difference became more pronounced in Pay Band 4 as compared to the other three pay bands, resulting in varying fitment factors for various levels and promotional benefits that were perceived to be rather differentiated, according to the 7th CPC report. The same pattern was also seen in the pension fixation too.

Because of the above reason, the 7th CPC decided to do away with pay bands and grade pay, replacing them with a pay matrix.

"To begin with, the system of Pay Bands and Grade Pay has been dispensed with and the new functional levels being proposed have been arrived at by merging the grade pay with the pay in the pay band. All of the existing levels have been subsumed in the new structure; no new level has been introduced nor has any existing level been dispensed with," the 7th CPC said.

The 7th CPC report mentioned the following reasons for replacing the then-existing pay model with the new pay structure devised in the form of a pay matrix:

1. The previous pay structures based on pay scales or pay bands indicated the definite boundaries within which the pay of an individual could lie. It was, however, difficult to ascertain the exact pay of an individual at any given point in time.

2. The way the pay progression would fan out over a period of time was also not evident. Since various cadres are designed differently, the relative pay progression also varies.

3. Any new entrant to a service would wish to be able to make a reasonable and informed assessment of how his/her career path would traverse and how the emoluments will progress alongside.

According to 7th CPC report, the pay matrix-based model was supposed to provide complete transparency regarding pay progression.

"The Commission has designed the new pay matrix keeping in view the vast opportunities that have opened up outside government over the last three decades, generating greater competition for human resources and the need to attract and retain the best available talent in government services," it said.