Govt Decision on 7th Central Pay Commission Recommendations – MSP for Defence Personnel

Fitment Factor: The Seventh CPC has recommended fitment in the pay band in the following manner:- ‘The fitment in the new matrix is essentially a multiple factor of 2.57. This multiple is the ratio of the new minimum pay arrived at by the Commission and the existing minimum pay. The fitment factor is being applied uniformly to all employees. It includes a factor of 2.25 to account for DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay as on 01.01.2016. The actual raise/fitment being recommended by the Commission is 14.29 percent. An identical fitment of 2.57 has also been applied to the existing rates of Military Service Pay (MSP), applicable to Defence forces personnel only.’ (Para 5.2.7)

Minimum Pay, Fitment Factor, Index of Rationalisation, Pay Matrices and general recommendations on pay recommended by the Commission have been accepted without any material alteration with the following exceptions in Defence Pay Matrix, namely:-

a) The Index of Rationalisation of Level 13A (Brigadier) in Defence Pay Matrix would be revised upward from 2.57 to 2.67.

b) Additional 3 stages in Levels 12A (Lt. Col), 3 stages in Level 13 (Colonel) and 2 stages in Level 13A (Brigadier) would be added appropriately in the Defence Pay Matrix.

Rate of increment: The rate of annual increment is being retained at 3 per cent. ( Para 5.1.38)

There would be two dates for grant of increment viz. 1 st January and 1st July of every year, instead of existing date of 1st July. However, an employee will be able to avail annual increment only on one of these two dates depending on the date of appointment, promotion or grant of financial
upgradation.

 Military Service Pay for Officers: The Defence forces personnel, in addition to their pay as per the Matrices above, will be entitled to payment of Military Service Pay for all ranks up to and inclusive of Brigadiers and their equivalents. The Commission recommends an MSP for Defence forces personnel at Rs 15,500 for the Service Officers and Rs 10,800 for Nursing Officers.

MSP will continue to be reckoned as Basic Pay for purposes of Dearness Allowance, as also in the computation of pension. Military Service Pay will however not be counted for purposes of House Rent Allowance, Composite Transfer Grant and Annual Increment.(Para No. 5.2.22)

Rate of Military Service Pay (MSP) is accepted. However, MSP will be counted only for Dearness Allowance (DA) and Pension.