Modifications in the 7th CPC recommendations on pay and pensionary benefits approved by the Cabinet on 3rd May, 2017
The
Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved
important proposals relating to modifications in the 7th CPC (Central
Pay Commission) recommendations on pay and pensionary benefits in the
course of their implementation. Earlier, on 29th June, 2016, the Cabinet
had approved implementation of the recommendations with an additional
financial outgo of Rs.84,933 crore for 2016-17 (including arrears for 2
months of 2015-16).
The benefit of the proposed modifications will
be available with effect from 1stJanuary, 2016, i.e., the date of
implementation of 7th CPC recommendations. With the increase approved by
the Cabinet, the annual pension bill alone of the Central Government is
likely to be Rs.1,76,071 crore. Some of the important decisions of the
Cabinet are mentioned below:
1. Revision of pension of pre -2016 pensioners and family pensioners
The
Cabinet approved modifications in the recommendations of the 7th CPC
relating to the method of revision of pension of pre-2016 pensioners and
family pensioners based on suggestions made by the Committee chaired by
Secretary (Pensions) constituted with the approval of the Cabinet. The
modified formulation of pension revision approved by the Cabinet will
entail an additional benefit to the pensioners and an additional
expenditure of approximately Rs.5031 crore for 2016-17 over and above
the expenditure already incurred in revision of pension as per the
second formulation based on fitment factor. It will benefit over 55 lakh
pre-2016 civil and defence pensioners and family pensioners.
While
approving the implementation of the 7th CPC recommendations on
29thJune, 2016,the Cabinet had approved the changed method of pension
revision recommended by the 7th CPC for pre-2016 pensioners, comprising
of two alternative formulations, subject to the feasibility of the first
formulation which was to be examined by the Committee.
In terms
of the Cabinet decision, pensions of pre-2016 pensioners were revised as
per the second formulation multiplying existing pension by a fitment
factor of 2.57, though the pensioners were to be given the option of
choosing the more beneficial of the two formulations as per the 7th CPC
recommendations.
In order to provide the more beneficial option to
the pensioners, Cabinet has accepted the recommendations of the
Committee, which has suggested revision of pension based on information
contained in the Pension Payment Order (PPO) issued to every pensioner.
The revised procedure of fixation of notional pay is more scientific,
rational and implementable in all the cases. The Committee reached its
findings based on an analysis of hundreds of live pension cases. The
modified formulation will be beneficial to more pensioners than the
first formulation recommended by the 7th CPC, which was not found to be
feasible to implement on account of non-availability of records in a
large number of cases and was also found to be prone to several
anomalies.
2. Disability Pension for Defence Pensioners
The
Cabinet also approved the retention of percentage-based regime of
disability pension implemented post 6thCPC, which the 7th CPC had
recommended to be replaced by a slab-based system.
The issue of
disability pension was referred to the National Anomaly Committee by the
Ministry of Defence on account of the representation received from the
Defence Forces to retain the slab-based system, as it would have
resulted in reduction in the amount of disability pension for existing
pensioners and a reduction in the amount of disability pension for
future retirees when compared to percentage-based disability pension.
The
decision which will benefit existing and future Defence pensioners
would entailan additional expenditure of approximately Rs.130 crore per
annum.
3. Changes in Pay Structure and Revision of the three Pay Matrices:
The
Cabinet, while approving the 7th CPC recommendations for their
implementation on 29thJune, had made two modifications in the Defence
Pay Matrix as under:
(i) Index of Rationalisation (IOR) of Level 13A (Brigadier) may be increased from 2.57 to 2.67.
(ii)
Additional 3 stages in Levels 12A (Lt. Col.) , 3 stages in Level 13
(Colonel) and 2 stages in Level 13A (Brigadier) may be added.
The
Cabinet has now approved further modifications in the pay structure and
the three Pay Matrices, i.e. Civil, Defence and Military Nursing
Service (MNS). The modifications are listed below:
(i)
Defence Pay Matrixhas been extended to 40 stages similar to the Civil Pay Matrix: The
7th CPC had recommended a compact Pay Matrix for Defence Forces
personnel keeping in view the number of levels, age and retirement
profiles of the service personnel.Ministry of Defence raised the issue
that the compact nature of the Defence Pay Matrix may lead to stagnation
for JCOs in Defence Forces and proposed that the Defence Pay Matrix be
extended to 40 stages.
The Cabinet decision to extend the Defence
Pay Matrix will benefit the JCOs who can continue in service without
facing any stagnation till their retirement age of 57 years.
(ii)
IOR for Levels 12 A(Lt. Col. and equivalent)and 13(Colonel and
equivalent)in the Defence Pay Matrix and Level 13 (Director and
equivalent)in the Civil Pay Matrix has been increased from 2.57 to 2.67:
Variable IOR ranging from 2.57 to 2.81 has been applied by the
7th CPC to arrive at Minimum Pay in each Level on the premise that with
enhancement of Levels from PayBand 1 to 2, 2 to 3 and onwards, the
role, responsibility and accountability increases at each step in the
hierarchy. This principle has not been applied in respect of Levels 12A
(Lt. Col. and equivalent), 13 (Colonel and equivalent) and 13A
(Brigadier and equivalent) of Defence Pay Matrix and Level 13 (Director
and equivalent) of the Civil Pay Matrix on the ground that there was a
disproportionate increase in entry pay at the level pertaining to GP
8700 in the 6thCPC regime. The IOR for Level 13A (Brigadier and
equivalent) in the Defence Pay Matrix has already been revised upwards
with the approval of the Cabinet earlier. In view of the request from
Ministry of Defence for raising the IOR for Levels 12 A and 13 of the
Defence Pay Matrix and requests from others, the IOR for these levels
has been revised upwards to ensure uniformity of approach in determining
the IOR.
(iii) To give effect to the decisions to extend the
Defence Pay Matrix and to enhance the IORs, the three Pay Matrices
-Civil, Defence and MNS -have also been revised. While doing so, two
calculation errors noticed in the MNS Pay Matrix have also been
rectified.
(iv) To ensure against reduction in pay, benefit of pay
protection in the form of Personal Pay was earlier extended to officers
when posted on deputation under Central Staffing Scheme (CSS) with the
approval of Cabinet. The benefit will also be available to officers
coming on Central Deputation on posts not covered under the CSS.
