The central government on Tuesday announced the constitution of the 7th Pay Commission with Ashok Kumar Mathur, retired Supreme Court judge and retired chairman of Armed Forces Tribunal, as its chairman.
''The prime minister has approved the composition of the 7th Central Pay Commission,'' a finance ministry release stated today.
The announcement, comes close on the heels of a 10 per cent hike in dearness allowance for the central staff.
The Pay Commission has been set up to recommend a revised salary structure for central government employees - both in civil and military services.
The government has named Meena Agarwal (OSD, Department of Expenditure) as its secretary and Vivek Rae, secretary in the ministry of petroleum and natural gas, as full-time member of the commission. Rathin Roy, director of the National Institute of Public Finance and Policy, will be a part-time member.
The announcement comes at a time when central government employees have pressed for the setting up of a pay commission after the DA rates have touched 100 per cent of basic pay, double the percentage needed for merging DA with basic pay.
The setting up of the Pay Commission will benefit over 5 million central government employees, including 3 million pensioners.
The prime minister had, in September 2013, approved the setting up of the 7th Pay Commission.
The commission has to submit its report within two years and its recommendations will be implemented from 1 January 2016.
The 6th Pay Commission, headed by Justice BN Srikrishna, was constituted on 5 October 2006. It submitted its report on 24 March 2008, but its recommendations were implemented retrospectively from 1 January 2006.
The government accepted most of the recommendations of the 6th Pay Commission with some modifications.
But it rejected a few recommendations such as a liberal severance package for employees who want to leave service early and another seeking to limit the number of holidays in a year to three as also a suggestion for flexible work hours for women and flexi-weeks for employees with disabilities.
The government also deferred some recommendations on bonus and overtime allowance, lateral shift of defence personnel to central paramilitary forces, corporatisation of Indian Railways, and abolition of Indian Telecom Services and Telecom Commission.