Calculation of annual increment as per 7th CPC report

7th Pay Commission recommends 3% of the basic Pay for Annual Increment

Annual Increment in Seventh Pay commission remains same. 3% of Basic Pay has been recommended as Annual Increment. But calculation of Annual Increment differs in a way that Pay matrix has been evolved.

In the pre revised Pay, the exact 3 % of the Pay band + Grade Pay would be added in the Pay band on account of Annual Increment on 1st July of every year.

But here in 7th pay commission there is a possibility to get little more or Less than the three percent of Basic Pay. Because here our Basic Pay has to be moved one stage higher in the same Level. In Pay Matrix, each cell in that particular level is calculated such a way that it is 3% higher than the next cell. Since the figure rounded off to nearest hundred, exact three percent increase cannot be expected.

7th Pay Commission gave an Illustrative Example in Respect of Granting Annual Increment.

Suppose, Ms. ABC, who, after having been fixed in the Pay Matrix, is drawing a Basic Pay of Rs.32,300 in Level 4.

When she gets an annual increment on 1st of July, she will just move one stage down in the same Level.

Hence, after increment, her pay will be Rs.33,300.