(iii) Rank Pay (Review and enhancement of Grade Pay): The matter relating to grade pay to officers was examined in 2008 also. The Government after a long deliberation on the VI CPC recommendations decided to increase Grade Pay of middle level Armed Forces (except Lt/equiv) thereby meeting the demand of the Services, but did not accept its point on the issue of merger of Rank Pay in Basic Pay. Subsequently, while examining draft Service Instructions for pay revision, Ministry of Finance also did not approve the merger of Rank Pay and Basic Pay and observed that pre-revised scale and Rank Pay should be shown distinctly in two separate columns in pay fixation tables. Accordingly, Service instructions were issued. The demand in case of PBORs was not part of the issues/anomalies raised by the Services in 2009. However, the matter was raised in 2011 and was not agreed to.
Not merging Rank Pay with Basic Pay was upheld in the Pranab Mukherjee Report. It was also emphaised therein that the Central Pay Commissions are recommendatory authorities and the final decision of the pay scales as well as the parity between various levels/ranks of civilian and armed forces officers is taken by the Cabinet, and as such the Cabinet decision is the final word on the subject.