Bunching of pay

Bunching of pay is the grant of one additional increment where two or more consecutive stages of a pre-revised pay band and grade pay are fixed at the same cell of the 7th CPC pay matrix. The 7th Central Pay Commission recommended it at paragraph 5.1.36 of its report of 19 November 2015, and the Department of Expenditure settled the working method by Office Memorandum No. 1-6/2016-IC dated 3 August 2017. It applied to the fixation of pay from the 6th CPC pay structure to the pay matrix with effect from 1 January 2016.

The problem it corrects is arithmetical. The cells of the pay matrix are fixed points, so two employees who drew different pay in the 6th CPC running pay band can both convert, after multiplication by the 2.57 fitment factor, to figures that fall on one cell. The senior loses the increments already earned. Bunching restores the difference by moving the senior to the next cell.

Four Department of Expenditure orders govern it, and the last two carry the working illustrations. The rule is one increment for every two consecutive stages bunched; two pays count as consecutive stages only where they are at least 3% apart in the 6th CPC structure; pay stages below the 6th CPC entry pay for the level are not counted; and the benefit does not cascade to a third stage that lands on the cell the bunching created.

This article sets out the rule and the three conditions on it, the two worked illustrations printed in the primary sources, why bunching has no application to a fixation on promotion, the review and re-fixation the 2017 order directed and the limits on recovering an excess, the standing staff-side demand that the 3% condition be dropped, the effect on pension, the position for railway employees, how the 5th and 6th Pay Commissions handled the same problem differently, and what is and is not settled for the 8th Central Pay Commission.

What bunching is

Bunching is what happens when two different pre-revised pays convert to the same cell of the revised pay matrix, so the pay difference between the two employees disappears at the conversion. The word is not used in the CCS (Revised Pay) Rules, 2016, and the relief rests entirely on the 7th CPC report and the Department of Expenditure orders issued under file No. 1-6/2016-IC.

The mechanism is the fixed-cell design of the matrix. Rule 7 of the CCS (Revised Pay) Rules, 2016 multiplies existing basic pay by 2.57 and places the employee at the cell of the applicable level equal to that figure, or at the next higher cell where no cell matches. Two figures 3% apart can both fall short of the same cell and both be raised to it.

The unfairness is immediate and it is measurable in increments. An employee who had drawn one more annual increment than a colleague, and whose pay was therefore 3% higher on 31 December 2015, comes out on identical pay on 1 January 2016 unless the fixation is corrected.

Why it arose at the 7th CPC transition

Bunching arose in 2016 because the 6th CPC pay structure was continuous and the 7th CPC structure is not. The 6th CPC used a running pay band with a grade pay, in which the annual increment was 3% of pay in the band plus grade pay, added to the running pay and rounded to the next multiple of Rs. 10. Employees on one grade pay were therefore spread across many closely spaced figures according to the increments each had drawn.

The 7th CPC replaced the pay band and grade pay with a grid. Each of the 18 levels is a printed column of cells rising in steps of 3% rounded to the nearest hundred rupees, and there is nothing between one cell and the next. When the closely spaced 6th CPC figures were multiplied by 2.57 and raised to the next cell, several of them landed on one.

The Commission saw it coming and said so. Paragraph 5.1.36 records that the rationalisation had been done to keep bunching to a minimum, and provides that where the situation does arise, one additional increment equal to 3% may be given for every two stages bunched, with pay fixed in the subsequent cell of the pay matrix.

The rule: one increment for every two bunched stages

The benefit is one additional increment, equal to 3%, for every two consecutive stages bunched, with the employee placed at the next cell of the level for each increment. Paragraph 8 of the Department of Expenditure Office Memorandum No. 1-6/2016-IC dated 3 August 2017, signed by V. K. Singh, Director, states the four conditions that make up the whole rule.

The first condition is the trigger, and it is not what the Commission wrote. Paragraph 5.1.36 of the report says the benefit arises “whenever more than two stages are bunched together”. The 3 August 2017 Office Memorandum provides instead that it is extended when two or more stages get bunched, which brings in the commonest case of exactly two and is a relaxation in the employee’s favour rather than a restatement.

The other three conditions narrow it. One increment is given for every two consecutive stages bunched, a difference of 3% is to be reckoned for determining consecutive pay stages specific to each employee, and all pay stages lower than the entry pay in the 6th CPC pay structure as indicated in the pay matrix printed in the 7th CPC report are left out of the computation. Two bunched stages therefore give one increment and four give two, each increment moving the employee one cell up the same level.

The 3% test for consecutive stages

Two pre-revised pays count as consecutive stages only where they are at least 3% apart, and the test exists because the 6th CPC running pay band had no stages worth the name. Every multiple of Rs. 10 in the band was technically a pay stage, so a single grade pay carried dozens of adjacent figures, and treating each of them as a stage would have manufactured bunching everywhere.

The Department of Expenditure fixed the threshold at the rate of the annual increment itself. Office Memorandum No. 1-6/2016-IC dated 7 September 2016 introduced the test, drawing on the illustration at paragraph 5.1.37 of the 7th CPC report, in which the two pays compared differ by 3%. The 3 August 2017 order restated it as condition three and the 7 February 2019 order restated it again at paragraph 9.

The test is computed for the individual, not from a table. Because increments in a running pay band compound on each employee’s own pay, the set of consecutive stages below any given figure is specific to that employee’s service history, which is why neither order publishes a stage list and why a claim has to be worked from the employee’s own pay particulars.

The entry-pay floor

Pay stages below the 6th CPC entry pay for the level are not counted, and this is condition four of the Office Memorandum of 3 August 2017. The exclusion is stated by reference to the entry pay shown in the 6th CPC pay structure as it is printed in the pay matrix contained in the 7th CPC report, not to the revised entry cell of the level.

The reason is the differential entry pay the 7th CPC removed. Before 2016, employees who entered the same grade by different routes could carry different entry pays, and the Commission built each level on a single entry pay to close that gap. Counting stages below the entry pay would have let the old differential back in through the bunching computation.

The practical effect is that an employee sitting at or just above the 6th CPC entry pay for the level has no stages beneath to bunch with, and so no claim, however many colleagues share the cell.

The four governing orders

Bunching under the 7th CPC rests on four Department of Expenditure orders, all issued by the Implementation Cell under file No. 1-6/2016-IC, and on paragraphs 5.1.36 and 5.1.37 of the report. No rule in the CCS (Revised Pay) Rules, 2016 mentions it.

The order of 13 June 2017 is the one usually missed, and it explains why fixations done in 2016 and 2017 differ. It records that a large number of references had been received seeking clarification, that some offices had extended the benefit on a subjective reading of the September 2016 order, and directs that where orders had been issued but not implemented they were not to be given effect to until detailed instructions issued. That hold lasted seven weeks.

The order of 7 February 2019, signed by Amar Nath Singh, Director, carries the file number No. 1-6/2016-IC/E-IIIA and is the last word on the subject. Its paragraph 3 states that the bunching principles of the 6th and 7th Pay Commissions differ and that the 7th CPC recommendation is to be applied strictly on its own terms.

Worked example from the Commission’s report

Paragraph 5.1.37 of the 7th CPC report works the case of two employees drawing Rs. 53,000 and Rs. 54,590 in grade pay 10000, a difference of exactly 3%. Multiplied by 2.57 the two figures give Rs. 1,36,210 and Rs. 1,40,296. Both would be fixed at the first cell of the level, Rs. 1,44,200, so the Commission fixes the employee on Rs. 54,590 at the second cell instead, Rs. 1,48,500.

The illustration carries one discrepancy worth naming, because it misleads readers who check it against the matrix. The sentence says the pay is fixed in the first cell of “level 15”, while Rs. 1,44,200 is the entry cell of Level 14 in Table 5 of the same chapter, grade pay 10000 being a Level 14 grade. Level 15 begins at Rs. 1,82,200. Level 13A was printed in Table 5 from the start and was not inserted later, so the numbering in the Commission’s own table is the numbering that was notified. The figures in the illustration are right and the level number in the sentence is not.

The arithmetic behind the second cell is the ordinary increment step. Rs. 1,44,200 multiplied by 1.03 is Rs. 1,48,526, printed as Rs. 1,48,500 on the nearest-hundred convention that the whole matrix follows.

Worked example at Level 13

Paragraph 9(i) of the Office Memorandum dated 7 February 2019 works the same rule in Level 13, the Pay Band-4 grade pay 8700 level, and is the illustration a departmental fixation is checked against.

Rs. 47,490 is 3.01% above Rs. 46,100, so the two are consecutive stages. Both consolidated figures fall short of Rs. 1,23,100 and are raised to it, which bunches them, and the higher of the two moves one cell to Rs. 1,26,800.

The entry cell used here is the corrected one. Level 13 was originally printed at Rs. 1,18,500, and the Central Civil Services (Revised Pay) (Amendment) Rules, 2017, notified as G.S.R. 592(E) on 15 June 2017 with effect from 1 January 2016, raised it to Rs. 1,23,100 by revising the index of rationalisation for that level from 2.57 to 2.67. A bunching calculation run against the superseded Rs. 1,18,500 column produces the wrong answer, since Rs. 1,18,477 would have been raised only to Rs. 1,18,500 and the two pays would not have bunched at all.

No cascading benefit to a third stage

A third employee whose consolidated pay lands on the cell created by someone else’s bunching gets nothing further. Paragraph 9(ii) of the Office Memorandum dated 7 February 2019 adds a third row to the Level 13 illustration to settle the point.

The employee on Rs. 48,920 consolidates to Rs. 1,25,724, is raised to the next cell at Rs. 1,26,800, and now shares that cell with the employee moved there by bunching. No further action is taken. The benefit is worked once against the fixation as it stood on 1 January 2016, not iteratively against each cell the correction produces, and a claim built on the second round is not admissible.

No application to promotion or MACP fixation

Bunching has no application to a fixation on promotion or on the Modified Assured Career Progression scheme. It belongs to the 1 January 2016 migration from the 6th CPC pay structure to the pay matrix and to nothing else.

The reason is structural. Rule 13 of the CCS (Revised Pay) Rules, 2016 fixes pay on promotion in two steps: one increment is added in the level the employee currently occupies, and the employee is then placed at the cell of the promoted level equal to that figure or at the next higher cell. Both steps operate on a cell the employee actually occupies in the matrix, so two employees promoted from different cells arrive at cells that preserve their order, and the collapse that bunching corrects cannot occur.

Pay fixation on promotion and the date-of-next-increment option under Rule 13 were separately clarified by Office Memorandum No. 13/02/2017-Estt.(Pay-I) dated 27 July 2017, which is the order to cite for that calculation. Where a senior ends up drawing less than a junior after a promotion fixation, the remedy is stepping up of pay, not bunching.

Review of past cases and recovery of an excess

The Office Memorandum of 3 August 2017 directed every ministry and department to review all cases in which the bunching benefit had been extended and to re-fix the pay in accordance with the four conditions it laid down. Fixations done between September 2016 and June 2017 on a wider reading of the first order were the target, and some of them were reduced.

Where a re-fixation produced an over-payment, recovery is not automatic. In State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, decided on 18 December 2014, the Supreme Court held recovery impermissible from Group C and Group D employees, from employees who have retired or are due to retire within one year of the recovery order, where the excess was paid over a period exceeding five years before the order was issued, where the employee had wrongly been required to discharge the duties of a higher post, and in any other case where recovery would be so harsh as to outweigh the employer’s right to recover.

DoPT Office Memorandum No. 18/03/2015-Estt.(Pay-I) dated 2 March 2016 directs ministries to follow that decision, and reserves waiver in any other case to the express approval of the Department of Expenditure. An employee facing recovery of a bunching increment granted in 2016 is squarely within the five-year limb of Rafiq Masih on any order issued after 2021.

The staff-side demand to remove the 3% condition

The removal of the 3% condition is a live staff-side demand and not a settled reading of the rule. It was carried into the National Anomaly Committee constituted after the 7th CPC through the Joint Consultative Machinery, alongside the method of fixation of pay on promotion, the general removal of anomalies in the matrix, and the question of lesser pay in a higher level.

The staff-side case is that the 6th CPC running pay band produced increments that did not land neatly on 3% multiples, so an employee whose two stages differ by 2.8% is denied a benefit that an identically placed colleague at 3.05% receives. The government position has been to keep the test, on the ground that the Commission’s own illustration at paragraph 5.1.37 is built on a 3% difference.

The condition stands. The Office Memorandum of 7 February 2019 restated the 3% test at paragraph 9 rather than relaxing it, and no later order has amended it. The route for an individual grievance remains the pay anomaly and anomaly committee machinery or the Central Administrative Tribunal, not a departmental reading of the order.

Effect on pension

A bunching increment raises pension, because it raises the pay on which pension is computed and every increment drawn afterwards. Rule 33 of the CCS (Pension) Rules, 2021 fixes pension at 50% of emoluments last drawn or of the average emoluments of the last ten months, whichever is more favourable, and emoluments means basic pay in the pay matrix.

The compounding matters more than the single cell. An extra cell carried from 1 January 2016 raises every later annual increment by 3% of a higher base, so an employee who retired in 2026 with the benefit sits a full cell above one who did not, and carries that difference into the pension calculation, the commutation value and the family pension that follows.

Employees whose 2016 fixation was re-opened by the review directed on 3 August 2017 should check that the pay recorded on the Pension Payment Order matches the re-fixed figure, because a stale service book entry propagates into the pension papers without anyone recomputing it.

Application to railway and defence employees

Railway employees receive the bunching benefit on the same terms, through the Railway Services (Revised Pay) Rules, 2016. Railway Board circular RBE No. 139/2017 dated 27 September 2017 applied the Department of Expenditure clarification of 3 August 2017 to those rules mutatis mutandis, and RBE No. 50/2019 dated 13 March 2019 circulated the further clarification of 7 February 2019 in the same way.

The pattern is the standard one for pay orders. The Department of Expenditure issues the order for civil employees under the CCS (Revised Pay) Rules, 2016, and the Railway Board, the Ministry of Defence and the autonomous bodies adopt it by their own circular against their own revised pay rules, so a railway employee cites the RBE number and the Department of Expenditure order together.

Bunching at the 5th, 6th and 7th Pay Commissions

Every pay commission that replaced one pay structure with another had to answer the same question, and each answered it differently. The 7th CPC method is not a continuation of the 6th CPC method, and paragraph 3 of the Office Memorandum dated 7 February 2019 says so in terms.

The 6th CPC expected its own bunching in Pay Band-1 with grade pay Rs. 1,800, because the whole of the erstwhile Group D was being placed there. The 5th CPC relief was expressed as a ratio against increments earned rather than as a stage test, which is why a 5th CPC precedent does not transfer.

Bearing on the 8th Central Pay Commission

No bunching provision exists for the 8th CPC, and none can until the Commission reports. The 8th Central Pay Commission was constituted by Department of Expenditure Resolution F. No. 01-01/2025-E.III(A) dated 3 November 2025, with 18 months to report, expiring on 3 May 2027. It has submitted no report and no interim report, and the Resolution fixes no fitment factor and no effective date.

What can be said is structural. Bunching arises whenever consecutive stages of an old structure land on a single cell of a new one, so it will arise again on any conversion from the present matrix, and the denser the new grid the more of it there will be. Whether the trigger is two stages or more than two, whether the stage test stays at 3% now that the increment rate is itself 3% in a matrix rather than in a running band, and whether an entry-pay floor is retained, are all matters for the Commission and for the notification that follows it.

Nothing about the 8th CPC fitment factor circulating in press coverage is a Government figure, and a bunching calculation cannot be run at all without the multiplier and the new cell values. The 7th CPC rule is the precedent, not the answer.

Related Articles

• Pay matrix
• Pay anomaly and the anomaly committee
• Fitment factor
• Entry pay
• Grade pay
• Pay band
• Annual increment
• Date of next increment
• Pay fixation
• Pay fixation on promotion
• Fundamental Rule 22
• Stepping up of pay
• Modified Assured Career Progression
• 7th Central Pay Commission
• 6th Central Pay Commission
• 5th Central Pay Commission
• CCS (Revised Pay) Rules, 2016
• Index of rationalisation
• Concordance table
• Minimum pay
• Notional pay fixation
• Pension calculation
• Commutation of pension
• Family pension
• PPO and the life certificate
• Central Administrative Tribunal
• Railway employees
• 8th CPC fitment factor
• 8th Central Pay Commission
• Department of Expenditure
• Take-home salary of central government employees
• Central government employees in India

External references

• Department of Expenditure
• Department of Expenditure: orders and circulars
• Department of Personnel and Training
• Department of Pension and Pensioners’ Welfare
• Ministry of Railways
• The Gazette of India

References

1. Report of the Seventh Central Pay Commission, submitted 19 November 2015, Chapter 5.1: paragraph 5.1.36 (one additional increment equal to 3% for every two stages bunched, pay fixed in the subsequent cell), paragraph 5.1.37 (the grade pay 10000 illustration on pay of Rs. 53,000 and Rs. 54,590), and Table 5 (the pay matrix, in which Rs. 1,44,200 is the entry cell of Level 14).
2. Ministry of Finance, Department of Expenditure, Implementation Cell, Office Memorandum No. 1-6/2016-IC dated 7 September 2016 (bunching benefit, and the 3% difference for counting consecutive pay stages in the 6th CPC pay structure).
3. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1-6/2016-IC dated 13 June 2017 (bunching orders issued but not implemented not to be given effect to pending detailed instructions).
4. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1-6/2016-IC dated 3 August 2017 (the four conditions: benefit when two or more stages bunch, one increment for every two consecutive stages, the 3% difference 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).
5. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1-6/2016-IC/E-IIIA dated 7 February 2019 (paragraph 3 on the 7th CPC principle applying on its own terms, paragraph 9 on pay more than 3% above the previous pay, and the illustrations at 9(i) and 9(ii) in Level 13).
6. Central Civil Services (Revised Pay) Rules, 2016, gazette notification G.S.R. 721(E) dated 25 July 2016: Rule 7 (fixation on 1 January 2016 at the 2.57 fitment factor) and Rule 13 (fixation on promotion).
7. Central Civil Services (Revised Pay) (Amendment) Rules, 2017, gazette notification G.S.R. 592(E) dated 15 June 2017, with effect from 1 January 2016 (Level 13 entry pay raised to Rs. 1,23,100 on an index of rationalisation of 2.67).
8. Railway Board circular RBE No. 139/2017 dated 27 September 2017 and RBE No. 50/2019 dated 13 March 2019 (application of the Department of Expenditure bunching clarifications to the Railway Services (Revised Pay) Rules, 2016).
9. State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, decided 18 December 2014, and DoPT Office Memorandum No. 18/03/2015-Estt.(Pay-I) dated 2 March 2016 (recovery of excess payments).
10. Central Civil Services (Pension) Rules, 2021, Rule 33 (pension at 50% of emoluments last drawn or of average emoluments of the last ten months, whichever is more favourable).
11. Ministry of Finance, Department of Expenditure Resolution F. No. 01-01/2025-E.III(A) dated 3 November 2025 (constitution of the Eighth Central Pay Commission, with 18 months to report).