New Delhi: In a good news for government employees of organised sector, the central government has decided to increased the gratuity limit to Rs. 20 lakh from Rs. 10 lakh, on the recommendation of 7th pay commission panel.
The decision came after a meeting between the labour ministry and
representatives from states, employees and employers which took place on
Thursday. “All the stakeholders—states, Centre, unions and the industry
representatives were on the same page to enhance the gratuity ceiling
from Rs10 lakh to Rs20 lakh,” a labour ministry spokesperson said after
the meeting.
The unions demanded the removal of conditions asking to have at least 10
employees in an establishment and minimum five years of service for
payment of gratuity. Business portal NDTV profit quoted Manoj Nagpal,
CEO of Outlook Asia Capital, saying it is not advisable to put money
entirely into debt as, “chances are that one might run out of his/her
corpus.” He added, “They have to plan for next 20-25 years as the life
expectancy has increased significantly. It is advisable that a person
puts at least 20-25 per cent in equities.”
“While accepting the maximum payment limit of Rs 20 lakh as an interim
measure, the unions demanded that the ceilings/ limit with respect to
number of employees and years of service should be removed,” the All
India Trade Union Congress (AITUC) said in a statement. “The central
trade unions have been urging the government that the ceiling in the
amount of gratuity should be removed,” the statement further read.
At present, as per the Payment of Gratuity Act, an employee is required
to do a minimum service of five years to become eligible for gratuity
amount. Moreover, the Act applies to those establishments where the
number of employees is not less than 10.The statement said the
application of amended provision regarding maximum amount should be made
effective from January 1, 2016 as done in the case of central
government employees.
