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.
