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 7^th 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 5^th CPC, and for 32 months at the time of implementation of 6^th CPC.  However, this time, 7^th 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.

 ***

PIB

Struggle programme of NJCA

UNION CABINET APPROVED 7^th PAY COMMISSION REPORT.

NO IMPROVEMENT IN ANY OF THE DEMANDS SOUGHT BY NJCA

INTENSIFY THE PREPARATIONS OF

INDEFINITE STRIKE FROM 11^TH JULY, 2016

7^th CPC – GOVERNMENT REJECTED ALL THE MODIFICATIONS SOUGHT BY THE NJCA

NO INCREASE IN MINIMUM PAY AND FITMENT FORMULA

HOLD PROTEST DEMONSTRATIONS & RALLY IN FRONT OF ALL OFFICES AND AT ALL IMPORTANT CENTRES

NJCA will meet at 04:00 PM on 30^th June 2016 to decide future course of action. Continue in full swing mobilization for indefinite strike from 11^th July 2016.

M. Krishnan

Secretary General

Confederation

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Revision in interest rate of Small Savings Schemes up to 30-09-2016

GO AHEAD WITH INTENSIVE PREPERATIONS FOR 11TH JULY 2016 INDEFINITE STRIKE - NJCA

NJCA

National Joint Council Of Actoin

4, State Entry Road, New Delhi – 110055

No.NJCA/2016                                                                                                  Dated: June 29, 2016

To,

All Constituents of NJCA,

Dear Comrades!

Sub: Cabinet approval on the VII CPC report

As all of you are aware that the Union Cabinet has accepted the report of the VII CPC today.

It has been noticed that there is no improvement in Minimum Wage and Multiplying Factor as well, which was our hard pressed demand. Instead, wages, as recommended by the VII CPC have been accepted as it is, which is highly disappointing.

Only two committees have been formed, one to take care of the allowances and another for National Pension Scheme, which will submit their reports within four months time.

It is quite unfortunate that, our demand for improvement in the report of the VII CPC has not been considered by the government.

Therefore, it would be quite appropriate that, we should go ahead with our preparations for “Indefinite Strike”, slated to be commended from 06:00 hrs. on 11th July, 2016.

You are also advised to intensify the mass mobilization and strong protests on all the offices and establishments be organized tomorrow, i.e. on 30.06.2016.

With fraternal greetings!

Comradely yours,

(Shiva Gopal Mishra)

Convener

..NJCA Decided to go for an indefinite strike from 11-07-2016

NJCA MEETING HELD TODAY (30^th JUNE) EVENING AT JCM NATIONAL COUNCIL STAFF SIDE OFFICE NEW DELHI, EXPRESSED ITS STRONG PROTEST AND DISSATISFACTION AGAINST THE UNILATERAL DECISION OF THE NDA GOVERNMENT ON 7^th CPC RECOMMENDATIONS, REJECTING ALL THE GENUINE AND JUSTIFIED MODIFICATIONS SOUGHT FOR BY THE NJCA AND UNANIMOUSLY DECIDED TO GO ON INDEFINITE STRIKE FROM 6 A.M. ON 11^TH JULY 2016.

NJCA CIRCULAR WILL FOLLOW.

M. KRISHNAN

SECRETARY GENERAL

CONFEDERATION

What does the 7th pay panel mean for govt. employees?

HERE IS AN OVERVIEW OF THE BENEFICIARIES – CENTRAL GOVERNMENT EMPLOYEES AND PENSIONERS – AND THE BUDGETARY IMPLICATION OF THESE RECOMMENDATIONS.

On Wednesday, the Union Cabinet approved the recommendations of the 7th Pay Commission (PC) on pay and pensionary benefits.

Here is an overview of the beneficiaries – central government employees and pensioners – and the budgetary implication of these recommendations.

How much would this cost?

If all recommendations of the 7th PC are considered, it will cost the government an additional amount of Rs.1,02,000 crore.

The government has cleared the pay (increase in expenditure by 16 per cent) and pension (increase in expenditure by 24 per cent) related recommendations that will cost Rs. 84,933 crore. Of this, Rs. 60,608 crore will be borne by General Budget and Rs. 24,325 crore from Railway Budget. Note that Rs. 70,000 crore was allocated in the Union Budget for implementation of the 7th PC.

For the remaining amount, which concerns recommendations around various allowances (increase in expenditure by 63 per cent), the government has set up committees to review the recommendations.

How much would be spent on Pay, Allowances and Pension as a proportion of GDP?

Over the last few years, Pay, Allowances and Pension (PAP) spending constitutes around 2.8 per cent of GDP. Additional expenditure, that includes all recommendations, will lead to an increase in 0.65 per cent of GDP on PAP, which is less than 6th PC, which led to an increase in 0.77 per cent of GDP on PAP.

Source: 7th Pay Commission Report

The 7th PC report says: “The Commission is of the view that this represents an extremely reasonable increase in the PAP-GDP ratio in the initial year of award. In future years this ratio will in fact decline, as GDP growth is expected to be faster than the growth rate of inflation in future years.”

How much proportion of total Union Budget is spent on salaries and pensions?

As of 2014-15, 7.8 per cent of total expenditure is spent on salaries and 4.6 per cent of total expenditure is spent on pensions.

Source: Indian Public Finance Statistics, Ministry of Finance; PRS

*2013-14 (Revised Estimates)

*2014-15 (Budget Estimates)

Spikes were observed after recommendations of 5th and 6th Pay Commissions were implemented.

What does Economic Survey 2016-17 say about 7th PC recommendations?

a. 7th PC implementation will bring increased spending from higher wages – boosting consumption.

b. The experience of 6th Pay Commission – with greater hikes – suggests that 7th PC will not destabilise prices nor will it increase inflation.

How many people will be benefited?

The Pay Commission concerns salaries and pensions of the Central Government employees. As of 2014, there were around 47 lakh central government employees. Armed forces happen to be the biggest employer, with 14 lakh employees. Pensioners – 52 lakh – are more in number than working employees.

What is Central Government’s share in organised sector employment?

The Central Government employed 8.5 per cent of the organised workforce in 2012. Its share in organised sector has declined over the past 15 years.

Source: Economic Survey of India; PRS

Between 2006 and 2014, all ministries (except Ministry of Home Affairs) witnessed a decrease in number of employees.

Who are the pension beneficiaries?

Source: 7th Pay Commission Report; PRS

Of the 52 lakh Central Government pensioners, 46.5 per cent belong to defence personnel – the largest proportion. PRS Legislative Research report says that “the large proportion of defence personnel among pensioners may be due to the early retirement age of defence services personnel as compared to other government departments.”

Railways comes next which has a share of 26.5 per cent among pensioners.

How do government salaries compare to the private sector?

As per the 7th PC report, at lower levels, salaries in government jobs are higher than in the private sector. These are understood to be Group C employees – those providing assistance – which constitute 88.7 per cent of all employees.

For example, a general helper – lowest ranked employee in the government – earns Rs. 22,579 per month in government job but around Rs. 9,000 in private job.

Source: 7th Pay Commission Report; PRS

But at the highest echelons of governance, the compensation in government is nowhere comparable to their counterparts in the private/public sector, says the 7th PC report. These are understood to be Group A employees – occupying higher administrative positions in government – which constitute 2.8 per cent of all employees. In light of this, the Commission has accorded slightly higher index of rationalisation at the level of Senior Administrative Grade and above.

Courtesy : :http://www.thehindu.com

NJCA meeting with Govt. held today :

TELANGANA POSTAL CIRCLE -- notified

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Retirement on Superannuation.

Com. Balabhadra Behera, O / S, Mails, Dhenkanal Sub 

Division retired on 30.06.2016 on attaining the age 

of superannuation. 

The AIPEU, Group-C, Dhenkanal Division  Wishes

Com. Behera a Happy and Healthy Retired Life.