The 7th Central Pay Commission (CPC) was constituted in February 2014 under the chairmanship of Justice A.K. Mathur with a mandate to review the pay, allowances, and benefits of Central Government employees, including defence personnel, railways, and pensioners. It aimed to create a fair, sustainable, and transparent compensation system for the public workforce. The Commission submitted its report in November 2015, and its recommendations came into effect from 1st January 2016.
In the 7th Pay Matrix, adoption of a uniform fitment factor of 2.57, replacement of grade pay with a simplified Pay Matrix, rationalisation of allowances, raising the minimum pay to ₹18,000 per month, and revising pensions in line with the new scales. The 7th CPC’s scope covered nearly 48 lakh employees and 55 lakh pensioners, making it one of India’s most comprehensive compensation reforms, designed to ensure equity, transparency, and simplicity across all cadres.