Bunching of pay

Bunching of pay grants an extra increment where two or more pre-revised stages get fixed at the same 7th CPC matrix cell, under the DoE order of 3 August 2017.

Updated 17 July 2026 · Reviewed by Salary-Calculator.in

Bunching of pay is what happens when the pay at two or more consecutive stages of a pre-revised pay scale gets fixed at the same cell of the revised pay matrix . It arose on the fixation of pay from the 6th Central Pay Commission to the 7th CPC pay matrix, and it matters because, without a correction, a senior employee who had earned more increments in the old structure could end up on exactly the same revised pay as a junior below them. The bunching rule prevents that, by granting an additional increment for every two stages that bunch, so the senior is moved up to the next cell and keeps the pay seniority they had earned.

The concept is technical, and it is largely a one-time event of the 2016 fixation, but it still matters: it fixed the starting pay of a whole cohort of serving employees and pensioners , and the same phenomenon will recur whenever the 8th Central Pay Commission maps the current structure onto a new one. This article explains what bunching is, why it happened at the 7th CPC, the one-increment-for-every-two-stages rule, the 3 per cent test for counting consecutive stages, the entry-pay floor, the governing orders, a worked example, and how it recurs at each transition.

What bunching is

When a new pay structure replaces an old one, every employee’s old pay is converted to the new scale by a fitment factor and then placed at the nearest appropriate cell of the new level . Because the new cells are fixed points, two employees who were at different stages in the old scale can convert to figures that both fall on the same new cell. Their pay is then said to be bunched.

The unfairness is immediate: the senior employee, who had drawn one or more extra increments in the old scale, is placed on the same revised pay as the junior, so the increments they had earned vanish in the conversion. Bunching is the rule that restores the difference, by lifting the senior to the next cell.

Why it happened at the 7th CPC

The 6th CPC used a running pay band with a grade pay, in which the annual increment was 3 per cent of the pay in the band plus the grade pay, added to the running pay. Employees in the same grade pay were therefore spread across many closely-spaced figures, according to how many increments each had drawn.

The 7th CPC replaced the running pay band with the pay matrix , a grid of fixed cells, and converted 6th CPC pay by the 2.57 fitment factor . When the closely-spaced 6th CPC figures were multiplied by 2.57 and placed at the nearest cell, several consecutive old stages could land on one new cell, producing bunching. The 7th CPC anticipated this in paragraph 5.1.36 of its Report, which recommended an additional increment for every two stages bunched.

The rule: one increment for every two bunched stages

The operative rule is simple to state:

benefit is extended when two or more stages get bunched; and
one additional increment, equal to 3 per cent, is given for every two consecutive stages that bunch.

So two bunched stages give one extra increment, three or four give two, and so on. For each increment the employee is placed at the next cell of the level, which is how the senior recovers the pay lead they had earned in the old structure.

The 3 per cent test for consecutive stages

The hard part is deciding what counts as a consecutive stage, because in the 6th CPC running pay band every multiple of Rs. 10 was technically a stage. Treating all of them as consecutive would inflate the benefit, so the Department of Expenditure fixed a threshold: two pays are counted as consecutive stages only if they are at least 3 per cent apart, that being the rate of the annual increment . Because increments in a running pay band differ from one employee to another, the consecutive stages are worked out specific to each employee rather than from a universal table. This 3 per cent test is the core of the bunching calculation.

The entry-pay floor

There is one important exclusion. The 7th CPC fixed an entry pay as the starting point of each level, closing the earlier gap between employees who had entered a grade at different entry pays. Consistent with that, the Department of Expenditure ruled that bunching cannot be reckoned with reference to pay stages below the 6th CPC entry pay for the level. Counting stages below the entry pay would have revived the very differential the 7th CPC set out to remove, so those lower stages are left out of the bunching computation.

The governing orders

Bunching in the 7th CPC was settled by three orders of the Implementation Cell of the Department of Expenditure, all numbered OM No. 1-6/2016-IC:

7 September 2016, which first gave effect to the bunching benefit and introduced the 3 per cent test;
13 June 2017, which withheld the bunching fixation until a uniform procedure was laid down; and
3 August 2017, the detailed clarification that is the operative order, setting out the one-increment-for-every-two-stages rule, the 3 per cent test, and the entry-pay floor, and directing departments to review and re-fix past cases.

A worked example

Take two employees in the same 6th CPC grade pay, one drawing pay Rs. 30,000 and a senior drawing Rs. 30,900, a difference of 3 per cent, so they are consecutive stages. On conversion to the 7th CPC, both figures are multiplied by 2.57, giving Rs. 77,100 and Rs. 79,413. If the nearest cell of the level is, say, Rs. 79,800, both would be placed there, bunched, and the senior would lose the increment they had earned.

Under the bunching rule, because two consecutive stages have bunched, the senior is given one additional increment and placed at the next cell above Rs. 79,800, while the junior stays at Rs. 79,800. The senior’s earned lead is restored. Had three or four consecutive stages bunched, the topmost would have been moved up by two cells, and so on.

Who it affected and the review of past cases

Bunching mattered most to employees who, at the 2016 fixation, were several increments up in their grade pay, since they were the ones at risk of converging with juniors on a single cell. Because the rule was clarified only in 2017, after many fixations had already been done, the 3 August 2017 order directed every ministry and department to review the cases where bunching had been allowed under the earlier 2016 order and to re-fix the pay in line with the settled rule. Employees whose pay was fixed in this period should therefore check that the bunching benefit, if due, was correctly worked out, because it feeds into every later increment and into the pension .

Bunching and the 8th Central Pay Commission

Bunching is a transition phenomenon: it appears whenever a pay commission maps an old structure onto a new one and consecutive old stages land on the same new cell. The 7th CPC orders relate to the 2016 fixation, but the 8th Central Pay Commission , constituted in November 2025, will on implementation convert 7th CPC pay to a new structure, and a similar bunching provision is likely to be needed for that fixation. Its exact form, the fitment factor, the stage test, and any floor, will depend on the Commission’s report and cannot be assumed from the 7th CPC rule.

Frequently Asked Questions (FAQs)

What is bunching of pay?

Bunching of pay is what happens when the pay at two or more consecutive stages of a pre-revised pay band and grade pay gets fixed at the same cell of the revised pay matrix. Because a senior at a higher stage would otherwise lose the benefit of the extra increments they had earned, the rules grant an additional increment for every two stages that bunch, moving the senior up to the next cell. It applied on the fixation of pay from the 6th CPC to the 7th CPC pay matrix.

How much is the bunching benefit?

One additional increment, equal to 3 per cent, is given for every two consecutive stages that get bunched into the same cell. So if two stages bunch, one increment is added; if three or four stages bunch, two increments; and so on. The employee is then placed at the next cell of the level for each increment, so they do not lose the seniority in pay they had earned in the old structure.

What is the 3 per cent rule in bunching?

In the 6th CPC running pay band every multiple of Rs. 10 was technically a pay stage, but not all of them count for bunching. Two pays are treated as consecutive stages only if they are at least 3 per cent apart, that being the rate of the annual increment, so the stages counted are specific to each employee. The 3 per cent test is how the Department of Expenditure decided which stages are genuinely consecutive for the bunching calculation.

Why are stages below entry pay not counted for bunching?

The 7th CPC set an entry pay as the starting point of each level, deliberately closing the gap that had existed between employees with different entry pays. The Department of Expenditure ruled that bunching cannot be reckoned with reference to pay stages below the 6th CPC entry pay for the level, because extending it there would revive the differential entry pay that the 7th CPC had removed.

Which order governs bunching in the 7th CPC?

The Department of Expenditure first gave effect to bunching by OM No. 1-6/2016-IC dated 7 September 2016, then withheld fixation for a uniform procedure by the OM of 13 June 2017, and issued the detailed operative clarification by the OM of 3 August 2017. The 3 August 2017 order sets out the one-increment-for-every-two-stages rule, the 3 per cent test, and the entry-pay floor, and directed departments to review past cases.

Does bunching apply in the 8th CPC?

Bunching is a transition phenomenon that can arise whenever a pay commission maps an old pay structure onto a new one and consecutive old stages land on the same new cell. So while the 7th CPC bunching orders relate to the 2016 fixation, the 8th Central Pay Commission, on implementation, is likely to carry its own bunching provision for the fixation from the 7th to the 8th structure, though the details will depend on its report.

External references

References

Seventh Central Pay Commission Report, paragraph 5.1.36 (recommendation that, where more than two stages are bunched, one additional increment equal to 3 per cent be given for every two stages bunched, with pay fixed at the subsequent cell of the pay matrix).
Department of Expenditure, Implementation Cell, Office Memorandum No. 1-6/2016-IC dated 7 September 2016 (bunching benefit and the 3 per cent difference for counting consecutive pay stages in the 6th CPC pay structure).
Department of Expenditure Office Memorandum No. 1-6/2016-IC dated 13 June 2017 (withholding bunching fixation pending a uniform procedure).
Department of Expenditure Office Memorandum No. 1-6/2016-IC dated 3 August 2017 (detailed clarification: benefit when two or more stages bunch, one increment for every two consecutive stages, the 3 per cent test specific to each employee, and the exclusion of pay stages below the 6th CPC entry pay, with a direction to review and re-fix past cases).
CCS (Revised Pay) Rules, 2016, and the pay matrix with the 2.57 fitment factor, against which the bunching of consecutive 6th CPC stages into a single revised cell is determined.