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Seventh (7th) Pay Commission Constituted & Its Implications

VII Pay Commission or 7th Pay Commission

It is a jubilation time for the Central govt and state govt employees as Finance Minister Shri P.Chidambaram in a statement said here today that the Prime Minister has approved the constitution of the Seventh Central Pay Commission. However the names of the committee forming seventh pay commission has been withheld and will be announced post consultation with major stakeholders.

We have included state govt employees in the same league as Central govt employees as generally state govts are quick to announce similar packages as central govt employees in order to keep morale high in their state employees.

The details of fourth, fifth and sixth Central Pay Commission's recommendations were implemented as following: 

4th CPC - 01 Jan 1986
5th CPC  - 01 Jan 1996
6th CPC - 01 Jan 2006

Generally a pay commission takes approx 2 years to complete their task and they have been given this much time to submit their recommendations. It is noteworthy that the recommendations are likely to be implemented with effect from 01 Jan 2016. However as per the laxity of the govt and previous norms we see it taking some additional time getting implemented but employees need not get worried as they get the benefits wef 01 Jan 2016. The details of the previous pay commissions is as following:


The major change in this pay commission is that Indian Armed forces are likely to have their own pay panel for the first time since independence. This is to assuage the aspirations of the forces and the ex servicemen as they have generally got a raw deal at the hands of the bureaucrats. However time will tell that whether Army, Navy and Airforce  can arrive at a consensus or put their foot on the axe. Just a recap; we had covered VI Pay commission update here. You can access latest DA hike update here. Do remember to spread the news and like it through your favourite social media as sharing is caring.

Implications of Pay commission for stock market

To be honest the seventh pay commision or VII Pay commission holds a lot of significance for Indians as it is going to put more money in the hands of govt employees which will in turn lead to higher consumption and will drive growth in all the sectors. For e.g. higher income means that more people can go for home which will rev up the real estate business and banking will auto get a boost by virtue of home loan demand. Just remember that a single home loan gives impetus to some 165 industries itself. Thus we will be out of any kind of recession and this was just one sole example and same yardstick can be applied to higher car sales and will boost automobile and in turn a number of associated industries.

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