Cabinet approves Implementation of the recommendations of 7th
Central Pay Commission: PIB News:
Main Points:
- It will come into effect from
01.01.2016.
- Arrears of pay and pensionary
benefits will be paid during the current financial year (2016-17)
- Minimum pay has been increased
from Rs. 7000 to 18000 p.m.
- A fitment factor of 2.57 will
be applied across all Levels in the Pay Matrices
- Gratuity ceiling enhanced from
Rs. 10 to 20 lakh.
- the ceiling of House Building
Advance enhanced from Rs. 7.50 lakh to 25 lakh
- Cabinet decided to constitute a
Committee headed by Finance Secretary for further examination of the
recommendations of 7th CPC on Allowances.
- The Cabinet also decided to
constitute two separate Committees for (i) NPS (ii) Anomalies
Press Information Bureau
Government of India
Cabinet
29-June-2016 18:49 IST
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 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.
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