Terms of Reference for 7th Central Pay Commission approved by Union Cabinet today......

The Union Cabinet today gave its approval to the Terms of Reference of 
7^th Central Pay Commission (CPC) as follows:-

a)      To examine, review, evolve and recommend changes that are desirable and 
feasible regarding the principles that should govern the emoluments structure 
including pay,allowances and other facilities/benefits, in cash or kind, having regard to 
rationalization and simplification therein as well as the specialized needs of various
 Departments, agencies and services, in respect of 

the following categories of employees:-

 i.    Central Government employees-industrial and non-industrial;

 ii.   Personnel belonging to the All India Services;

 iii.  Personnel of the Union Territories;

 iv. Officers  and   employees   of  the   Indian  Audit  and   Accounts Department;

 v. Members of regulatory bodies (excluding the Reserve Bank of India) set up under
 Actsof Parliament; 

and

     vi. Officers and employees of the Supreme Court.

b)      To examine, review, evolve and recommend changes that are desirable and 
feasibleregarding principles that should govern the emoluments structure, 
concessions and facilities/benefits, in cash or kind, as well as retirement benefits of 
personnel belonging to the Defence Forces, having regard to historical and traditional
 parities, with due emphasis on aspects unique to these personnel.

c)      To work out the framework for an emoluments structure linked with the need to

 attract the most suitable talent to Government service, promote efficiency, accountability

 and responsibility in the work culture, and foster excellence in the public governance 

system to respond to complex challenges of modern administration and rapid political,

 social, economic and technological changes, with due regard to expectations of 

stakeholders, and to recommend appropriate training and capacity building through a 

competency based framework.

d)     To examine the existing schemes of payment of bonus, keeping in view, among 

other things, its bearing upon performance and productivity and make recommendations

 on the general principles, financial parameters and conditions for an appropriate 

incentive scheme to reward excellence in productivity, performance and integrity.

e)      To review the variety of existing    allowances presently available to employees
 in addition to pay and suggest their rationalization and simplification, with a view to 

ensuring

that the pay structure is so designed as to take these into account.

f)       To examine the principles which should govern the structure of pension and 

other retirement benefits, including revision of pension in the case of employees who 

have retired prior to the date of effect of these recommendations, keeping in view that

 retirement benefits of all Central Government employees appointed on and after
 01.01.2004 are covered by the New Pension Scheme (NPS).

g)      To make recommendations on the above, keeping in view:

i.          the economic conditions in the country  and need for fiscal prudence;
ii.   the need to ensure that adequate resources are available for developmental 

expenditures and welfare measures;

iii.     the likely impact of the recommendations on the finances of the State 

Governments, which usually adopt the recommendations with some modifications;

iv.     the prevailing emolument structure and retirement benefits available to employees

 of Central Public Sector Undertakings; and
v.      the best global practices and their adaptability and relevance in Indian conditions.

h)To recommend the date of effect of its recommendations on all the above.

The Commission will make its recommendations within 18 months of the date of its 

constitution.  It may consider, if necessary, sending interim reports on any of the 

matters as and when the recommendations are finalised.

The decision will result in the benefit of improved pay and allowances as well as

 rationalization of the pay structure in case of Central Government employees and 

other employees included in the scope of the 7^th Central Pay Commission.

Background

            Central Pay Commissions are periodically constituted to go into various issues

 of emoluments’ structure, retirement benefits and other service conditions of Central 

Government employees and to make recommendations on the changes required.

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source:PIB