The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation. Earlier, in June, 2016, the Cabinet had approved implementation of the recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 (including arrears for 2 months of 2015-16).
The benefit of the proposed modifications will be available with effect
from 1st January, 2016, i.e., the date of implementation of 7th CPC
recommendations. With the increase approved by the Cabinet, the annual
pension bill alone of the Central Government is likely to be Rs.1,76,071
crore. Some of the important decisions of the Cabinet are mentioned
below:1.Revision of pension of pre – 2016 pensioners and family pensioners
The Cabinet approved modifications in the recommendations of the 7th CPC
relating to the method of revision of pension of pre-2016 pensioners
and family pensioners based on suggestions made by the Committee chaired
by Secretary (Pensions) constituted with the approval of the Cabinet.
The modified formulation of pension revision approved by the Cabinet
will entail an additional benefit to the pensioners and an additional
expenditure of approximately Rs.5031 crore for 2016-17 over and above
the expenditure already incurred in revision of pension as per the
second formulation based on fitment factor. It will benefit over 55
lakh pre-2016 civil and defence pensioners and family pensioners.
While approving the implementation of the 7th CPC recommendations on
29th June, 2016, the Cabinet had approved the changed method of pension
revision recommended by the 7th CPC for pre-2016 pensioners, comprising
of two alternative formulations, subject to the feasibility of the first
formulation which was to be examined by the Committee.
In terms of the Cabinet decision, pensions of pre-2016 pensioners were
revised as per the second formulation multiplying existing pension by a
fitment factor of 2.57, though the pensioners were to be given the
option of choosing the more beneficial of the two formulations as per
the 7th CPC recommendations.
In order to provide the more beneficial option to the pensioners,
Cabinet has accepted the recommendations of the Committee, which has
suggested revision of pension based on information contained in the
Pension Payment Order (PPO) issued to every pensioner. The revised
procedure of fixation of notional pay is more scientific, rational and
implementable in all the cases. The Committee reached its findings
based on an analysis of hundreds of live pension cases. The modified
formulation will be beneficial to more pensioners than the first
formulation recommended by the 7th CPC, which was not found to be
feasible to implement on account of non-availability of records in a
large number of cases and was also found to be prone to several
anomalies.
2.Disability Pension for Defence Pensioners
The Cabinet also approved the retention of percentage-based regime of
disability pension implemented post 6th CPC, which the 7th CPC had
recommended to be replaced by a slab-based system.
The issue of disability pension was referred to the National Anomaly
Committee by the Ministry of Defence on account of the representation
received from the Defence Forces to retain the slab-based system, as it
would have resulted in reduction in the amount of disability pension for
existing pensioners and a reduction in the amount of disability pension
for future retirees when compared to percentage-based disability
pension.
The decision which will benefit existing and future Defence pensioners
would entail an additional expenditure of approximately Rs. 130 crore
per annum.
Source : PIB
