Cabinet approves
Implementation of the recommendations of 7th 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 5thCPC, 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.
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.
***
Source:
Press Information Bureau, Government of India
(Release ID :146644)
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