Cabinet decisions on Implementation of the recommendations of Seventh Central Pay Commission
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits. It will come into effect from 01.01.2016.
In the past, the employees had to wait for 19 months for the implementation of the Commission’s recommendations at the time of 5th CPC, and for 32 months at the time of implementation of 6th CPC. However, this time, 7th CPC recommendations are being implemented within 6 months from the due date.
The Cabinet has also decided that arrears of pay and pensionary benefits will be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next financial year.
The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.
Highlights:
1. The present system of Pay Bands and Grade Pay has been dispensed with and a new Pay Matrix as recommended by the Commission has been approved. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the Pay Matrix. Separate Pay Matrices have been drawn up for Civilians, Defence Personnel and for Military Nursing Service. The principle and rationale behind these matrices are the same.
2. All existing levels have been subsumed in the new structure; no new levels have been introduced nor has any level been dispensed with. Index of Rationalisation has been approved for arriving at minimum pay in each Level of the Pay Matrix depending upon the increasing role, responsibility and accountability at each step in the hierarchy.
3. The minimum pay has been increased from Rs. 7000 to 18000 p.m. Starting salary of a newly recruited employee at lowest level will now be Rs. 18000 whereas for a freshly recruited Class I officer, it will be Rs. 56100. This reflects a compression ratio of 1:3.12 signifying that pay of a Class I officer on direct recruitment will be three times the pay of an entrant at lowest level.
4. For the purpose of revision of pay and pension, a fitment factor of 2.57 will be applied across all Levels in the Pay Matrices. After taking into account the DA at prevailing rate, the salary/pension of all government employees/pensioners will be raised by at least 14.29 % as on 01.01.2016.
5. Rate of increment has been retained at 3 %. This will benefit the employees in future on account of higher basic pay as the annual increments that they earn in future will be 2.57 times than at present.
6. The Cabinet approved further improvements in the Defence Pay Matrix by enhancing Index of Rationalisation for Level 13A (Brigadier) and providing for additional stages in Level 12A (Lieutenant Colonel), 13 (Colonel) and 13A (Brigadier) in order to bring parity with Combined Armed Police Forces (CAPF) counterparts at the maximum of the respective Levels.
7. Some other decisions impacting the employees including Defence & Combined Armed Police Forces (CAPF) personnel include :
· Gratuity ceiling enhanced from Rs. 10 to 20 lakh. The ceiling on gratuity will increase by 25 % whenever DA rises by 50 %.
· A common regime for payment of Ex-gratia lump sum compensation for civil and defence forces personnel payable to Next of Kin with the existing rates enhanced from Rs. 10-20 lakh to 25-45 lakh for different categories.
· Rates of Military Service Pay revised from Rs. 1000, 2000, 4200 & 6000 to 3600, 5200, 10800 & 15500 respectively for various categories of Defence Forces personnel.
· Terminal gratuity equivalent of 10.5 months of reckonable emoluments for Short Service Commissioned Officers who will be allowed to exit Armed Forces any time between 7 and 10 years of service.
· Hospital Leave, Special Disability Leave and Sick Leave subsumed into a composite new Leave named ‘Work Related Illness and Injury Leave’ (WRIIL). Full pay and allowances will be granted to all employees during the entire period of hospitalization on account of WRIIL.
8. The Cabinet also approved the recommendation of the Commission to enhance the ceiling of House Building Advance from Rs. 7.50 lakh to 25 lakh. In order to ensure that no hardship is caused to employees, four interest free advances namely Advances for Medical Treatment, TA on tour/transfer, TA for family of deceased employees and LTC have been retained. All other interest free advances have been abolished.
9. The Cabinet also decided not to accept the steep hike in monthly contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) recommended by the Commission. The existing rates of monthly contribution will continue. This will increase the take home salary of employees at lower levels by Rs. 1470. However, considering the need for social security of employees, the Cabinet has asked Ministry of Finance to work out a customized group insurance scheme for Central Government Employees with low premium and high risk cover.
10. The general recommendations of the Commission on pension and related benefits have been approved by the Cabinet. Both the options recommended by the Commission as regards pension revision have been accepted subject to feasibility of their implementation. Revision of pension using the second option based on fitment factor of 2.57 shall be implemented immediately. A Committee is being constituted to address the implementation issues anticipated in the first formulation. The first formulation may be made applicable if its implementation is found feasible after examination by proposed Committee which is to submit its Report within 4 months.
11. The Commission examined a total of 196 existing Allowances and, by way of rationalization, recommended abolition of 51 Allowances and subsuming of 37 Allowances. Given the significant changes in the existing provisions for Allowances which may have wide ranging implications, the Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th CPC on Allowances. The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates.
12. The Cabinet also decided to constitute two separate Committees (i) to suggest measures for streamlining the implementation of National Pension System (NPS) and (ii) to look into anomalies likely to arise out of implementation of the Commission’s Report.
13. Apart from the pay, pension and other recommendations approved by the Cabinet, it was decided that the concerned Ministries may examine the issues that are administrative in nature, individual post/ cadre specific and issues in which the Commission has not been able to arrive at a consensus.
14. As estimated by the 7th CPC, the additional financial impact on account of implementation of all its recommendations in 2016-17 will be Rs. 1,02,100 crore. There will be an additional implication of Rs. 12,133 crore on account of payments of arrears of pay and pension for two months of 2015-16.
Kishor says
Govt. is claiming that 7th CPC is historical, yes it is because of 2 factors 1) The lowest ever pay hike recommendation in the last 70 years and I am sure this type of recommendations (lowest) will not come in future also, and 2) It is going to be implemented with in 8 months of due time.The NDA Govt.is claiming the credit for the item no-2, but the real credit goes to the UPA Govt. as it was constituted in their tenure and it could have been implemented in time, but present Govt. has postponed it intentionally. The Govt. has formed an empowered committee with cabinet secretary as its head in Dec-15 which was of no use only loss of man power, now formed another committee with Finance Secretary as its head, it also will be proved as an eye wash for the CG employees. These are all to delay only to skip the arrears for the allowances, as you might have know in 6th CPC the arrears on the allowances were not payed and the same thing is going to be happened. Due to the delayed process by the Govt. the employees are going to lose a lot.
ASHOK says
Media needs to be compelled, to bring out proper picture about salary up-gradation by pay commission, and not to paint a wrong picture like a 3 fold hike in salaries. They do not want to know, what kind of harm they are inflicting on the psychology of the masses, by such sensational headlines. If feasible, acts against spreading rumors, should be applied against these media houses, to stop a false propaganda.
Correction should also start at the govt. level as the govt. notifications mention pay increase from Rs 7000 to 18000, very well knowing that it is not true. Looks that there is politics at play. Ruling dispensation always wants to show how much they are doing for their employees, though actually, it is only a small percentage of that claim. Govt also needs to learn to refrain away from these cheap gains.
Seshadrivikrala says
GREAT QUESTION YN( YES/ NO) FINANCIAL ADVISORS/ ACCOUNTS EXPERTS, AND YOU CAN SOLVE AND ANSWER!!! ON PAYMENT OF DIFFERENCE OF DA/DP ON NEW PAY/ PENSION FIXATION WORKING OUT FROM 01-01-2016….EXAMPLE!!!
As per new fixation table…OPTION…2 SUPPOSE THAT MY PRIOR PENSION OF Rs.10,000/- IS NOW FIXED AT Rs.12,000/- from 01-01-2016 and you a?re going to
pay the ARREARS accordingly??? Rs.2000/- per month from JAN TO JUNE…AS PER OPTION2 ONLY…
? IS IT POSSIBLE THAT WE ARE GOING TO GET DA DIFFERENCE???accordingly???i.e.
Am I also to get difference between the two of the old pension DA/DP AND THE NEW PENSION FIXED FROM 01-01-2016…THAT IS TO SAY ….present 125% paid on Rs.10,000/- and new fixed pension amount difference of DA OF Rs.125% on balance of increased pension of Rs.2000/-…
KINDLY ADVICE????
G.Rajamanickam says
Government accepted the recommendation and formulae with regard to fixation of revised pay. Government did not revise the recommendations of the Commission. The revised pay will be 2.57 times of existing Pay in the Pay Band plus Grade Pay as recommended by the VII th CPC.
Debosree Chatterjee says
Sir, thank u very much for highlighting the true scenario of this 7th Pay Commission matters regarding salary hike, pension, figment factors. I can’t understand that why this Snob Media people are creating nuisance and giving all rubbish in formations. Please ask them to refrain from these issues when they don’t know how with tremendous hardship and increased market rates we are surviving with struggle anyhow and with a petty increase of 500/600 in our pension its nothing when all commodity pieces has shouted highest.
SANDU SINGH says
Govt has declared that minimum pay of CG employees has been approved from Rs.7000 to Rs.18000/-. As per information of media annouces in TV channel , published in daily news papers by the correspondent, the general conception of public of India is that huge pay has been increased for CG employess and pensioners from Rs.7000/- to Rs.18000/- by the Govt. Generally they presumed that the difference of pay is (Rs.18000 – Rs.7000 ) = Rs.11000/-, thus it emplies that those who are drawing pay Rs.7000/- under 6th cpc as on 1.1.2016 would now draw Rs.18000/-
Let us, together, we discuss, whether it is true that minimum pay has been increased from Rs.7000/- to Rs.18000/- OR misinterpreted ?
My opinion is that how it can be treated as increase of minimum pay from Rs.7000/- to Rs.18000/- without taking into account of DA .
As per the prevailing pratices in every offices, and learnt mathematics calculaltion , the arrers and pay differences arrives PAY DUE AND PAY DRAWN as of calcuation.
Take the following illustration :-
A) As per the 6th cpc, an employee of minimum pay with Rs.7000/- is drawing his pay with prevailing rate of DA @ 125% is Rs.15750/- as of 1.1.2016.
B) 7th cpc, Minimum pay is approved Rs.18000/- as of 1.1.2016 without DA.
C) The difference of pay is Rs.18000 (7th cpc) – Rs.15750 (6th cpc) = Rs.2250-00 only as of 1.1.2016
How it can be treated as high pay hike from Rs.7000/- to Rs.18000/-? The percentage of increased pay is only 12.5%.
How the Govt is misinterpreting the C.G employees, pensioners and to the of 7th cpc pay increased from Rs.7000/- to Rs.18000/- without taking into account PAY DUE AND PAY DRAWN as on 1.1.2016.
If the Govt will not reconsider the minimum pay and Fitment Formula, grief and grievances of the CG employess and pensioners will be melancholy as long as BJP regime in the country.