7th Pay Commission Allowance to Pension here’s everything you need to know
The Union Cabinet is expected to take up on Wednesday the Empowered Committee of Secretaries’s report on the 7th Pay Commission.
The Empowered Committee of Secretaries,
which was formed to look into recommendations of the Seventh Pay
Commission, has finalised its report, Finance Secretary Ashok Lavasa
said.
Here is everything you need to know
about the proposed recommendations in the 7th Pay Commission. Read more
to find out what the Pay Commission changes are, if accepted by the
Cabinet.
Date of implementation
The recommended date of implementation is January 1, 2016. So, government employees will get arrears from January this year.
Minimum Pay
Based on the Aykroyd formula, the minimum pay in government is recommended to be set at Rs 18,000 per month.
Maximum Pay
Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level.
What are the financial implications?
The total financial impact in the FY
2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per
the Business As Usual scenario. Of this, the increase in pay would be Rs
39,100 crore, increase in allowances would be Rs 29,300 crore and
increase in pension would be Rs 33,700 crore.
Out of the total financial impact of Rs
1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and
Rs 28,450 crore by the Railway Budget.
In percentage terms the overall increase
in pay & allowances and pensions over the Business As Usual
scenario will be 23.55 per cent. Within this, the increase in pay will
be 16 per cent, increase in allowances will be 63 per cent, and increase
in pension would be 24 per cent.
The total impact of the Commission’s
recommendations are expected to entail an increase of 0.65 percentage
points in the ratio of expenditure on (Pay+Allowances+Pension) to GDP
compared to 0.77 per cent in case of 6th Central Pay Commission.
What is the New Pay Structure?
The present system of pay bands and
grade pay has been dispensed with and a new pay matrix has been
designed. Grade Pay has been subsumed in the pay matrix. The status of
the employee, hitherto determined by grade pay, will now be determined
by the level in the pay matrix.
Fitment
A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.
Annual Increment
The rate of annual increment is being retained at 3 per cent.
Modified Assured Career Progression (MACP)
* Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”.
* The Commission has also proposed that
annual increments not be granted in the case of those employees who are
not able to meet the benchmark either for MACP or for a regular
promotion in the first 20 years of their service.
* No other changes in MACP recommended.
Military Service Pay (MSP)
The Military Service Pay, which is a
compensation for the various aspects of military service, will be
admissible to the Defence forces personnel only. As before, Military
Service Pay will be payable to all ranks up to and inclusive of
Brigadiers and their equivalents. The current MSP per month and the
revised rates recommended are as follows:
|
Present |
Proposed |
| 1. |
Service Officers |
?6,000 |
?15,500 |
| 2. |
Nursing Officers |
?4,200 |
?10,800 |
| 3. |
JCO/ORs |
?2,000 |
?5,200 |
| 4. |
Non Combatants (Enrolled) in the Air Force |
?1,000 |
?3,600 |
Short Service Commissioned Officers
Short Service Commissioned Officers will
be allowed to exit the Armed Forces at any point in time between 7 and
10 years of service, with a terminal gratuity equivalent of 10.5 months
of reckonable emoluments. They will further be entitled to a fully
funded one year Executive Programme or a M.Tech. programme at a premier
Institute.
Lateral Entry/Settlement
The Commission is recommending a revised
formulation for lateral entry/resettlement of defence forces personnel
which keeps in view the specific requirements of organization to which
such personnel will be absorbed. For lateral entry into CAPFs an
attractive severance package has been recommended.
Headquarters/Field Parity
Parity between field and headquarters staff recommended for similar functionaries e.g Assistants and Stenos.
Cadre Review
A systemic change in the process of Cadre Review for Group A officers recommended.
Allowances
The Commission has recommended
abolishing 52 allowances altogether. Another 36 allowances have been
abolished as separate identities, but subsumed either in an existing
allowance or in newly proposed allowances. Allowances relating to Risk
and Hardship will be governed by the proposed Risk and Hardship Matrix.
Risk and Hardship Allowance: Allowances
relating to Risk and Hardship will be governed by the newly proposed
nine-cell Risk and Hardship Matrix, with one extra cell at the top,
viz., RH-Max to include Siachen Allowance.
The current Siachen Allowance per month and the revised rates recommended are as follows:
|
|
Present |
Proposed |
| i. |
Service Officers |
?21,000 |
?31,500 |
| ii. |
JCO/ORs |
?14,000 |
?21,000 |
House Rent Allowance
Since the Basic Pay has been revised
upwards, the Commission recommends that HRA be paid at the rate of 24
percent, 16 percent and 8 per cent of the new Basic Pay for Class X, Y
and Z cities respectively. The Commission also recommends that the rate
of HRA will be revised to 27 per cent, 18 percent and 9 percent
respectively when DA crosses 50 percent, and further revised to 30
percent, 20 per cent and 10 per cent when DA crosses 100 per cent.
In the case of PBORs of Defence, CAPFs
and Indian Coast Guard compensation for housing is presently limited to
the authorised married establishment hence many users are being
deprived. The HRA coverage has now been expanded to cover all.
Any allowance not mentioned in the report shall cease to exist.
Emphasis has also been placed on simplifying the process of claiming allowances.
Advances: a. All non-interest bearing
Advances have been abolished. b. Regarding interest-bearing Advances,
only Personal Computer Advance and House Building Advance (HBA) have
been retained. HBA ceiling has been increased to Rs 25 lakh from the
present Rs 7.5 lakh.
Central Government Employees Group
Insurance Scheme (CGEGIS): The Rates of contribution as also the
insurance coverage under the CGEGIS have remained unchanged for long.
They have now been enhanced suitably. The following rates of CGEGIS are
recommended:
|
Present |
Proposed |
| Level of Employee |
Monthly Deduction
(?) |
Insurance Amount
(?) |
Monthly Deduction
(?) |
Insurance Amount
(?) |
| 10 and above |
120 |
1,20,000 |
5000 |
50,00,000 |
| 6 to 9 |
60 |
60,000 |
2500 |
25,00,000 |
| 1 to 5 |
30 |
30,000 |
1500 |
15,00,000 |
Medical Facilities
Introduction of a Health Insurance Scheme for Central Government employees and pensioners has been recommended.
Meanwhile, for the benefit of pensioners
residing outside the CGHS areas, CGHS should empanel those hospitals
which are already empanelled under CS (MA)/ECHS for catering to the
medical requirement of these pensioners on a cashless basis.
All postal pensioners should be covered under CGHS. All postal dispensaries should be merged with CGHS.
Pension
The Commission recommends a revised
pension formulation for civil employees including CAPF personnel as well
as for Defence personnel, who have retired before 01.01.2016. This
formulation will bring about parity between past pensioners and current
retirees for the same length of service in the pay scale at the time of
retirement.
The past pensioners shall first be fixed
in the Pay Matrix being recommended by the Commission on the basis of
Pay Band and Grade Pay at which they retired, at the minimum of the
corresponding level in the pay matrix.
This amount shall be raised to arrive at
the notional pay of retirees, by adding number of increments he/she had
earned in that level while in service at the rate of 3 percent. In the
case of defence forces personnel this amount will include Military
Service Pay as admissible.
Fifty percent of the total amount so
arrived at shall be the new pension. An alternative calculation will be
carried out, which will be a multiple of 2.57 times of the current basic
pension.
The pensioner will get the higher of the two.
Gratuity
Enhancement in the ceiling of gratuity
from the existing Rs 10 lakh to Rs 20 lakh. The ceiling on gratuity may
be raised by 25 percent whenever DA rises by 50 percent. Disability
Pension for Armed Forces
The Commission is recommending reverting
to a slab based system for disability element, instead of existing
percentile based disability pension regime.
Ex-gratia lump sum compensation to next of kin
The Commission is recommending the
revision of rates of lump sum compensation for next of kin (NOK) in case
of death arising in various circumstances relating to performance of
duties, to be applied uniformly for the defence forces personnel and
civilians including CAPF personnel.
Martyr Status for CAPF Personnel
The Commission is of the view that in
case of death in the line of duty, the force personnel of CAPFs should
be accorded martyr status, at par with the defence forces personnel.
New Pension System
The Commission received many grievances
relating to NPS. It has recommended a number of steps to improve the
functioning of NPS. It has also recommended establishment of a strong
grievance redressal mechanism.
Regulatory Bodies
The Commission has recommended a
consolidated pay package of Rs 4,50,000 and Rs 4,00,000 per month for
Chairpersons and Members respectively of select Regulatory bodies. In
case of retired government servants, their pension will not be deducted
from their consolidated pay. The consolidated pay package will be raised
by 25 percent as and when Dearness Allowance goes up by 50 percent. For
Members of the remaining Regulatory bodies normal replacement pay has
been recommended.
Performance Related Pay
The Commission has recommended
introduction of the Performance Related Pay (PRP) for all categories of
Central Government employees, based on quality Results Framework
Documents, reformed Annual Performance Appraisal Reports and some other
broad Guidelines. The Commission has also recommended that the PRP
should subsume the existing Bonus schemes.
