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, on 29th
June, 2016, the Cabinet had approved implementation of the recommendations with
an additional financial outgo of ₹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 ₹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 ₹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 ₹130 crore per annum.
3.
Changes
in Pay Structure and Revision of the three Pay Matrices:
The Cabinet, while approving the 7th CPC
recommendations for their implementation on 29th June, had made two
modifications in the Defence Pay Matrix as under:
(i) Index of Rationalisation (IOR) of Level 13A
(Brigadier) may be increased from 2.57 to 2.67.
(ii) Additional 3 stages in Levels 12A (Lt Col),
3 stages in Level 13 (Colonel) and 2 stages in Level 13A (Brigadier) may be added.
The Cabinet has now approved further
modifications in the pay structure and the three Pay Matrices, i.e. Civil,
Defence and Military Nursing Service (MNS). The modifications are listed below:
(i)
Defence Pay Matrix has been extended to 40 stages similar to the Civil Pay
Matrix: The 7th CPC had recommended a compact Pay Matrix for
Defence Forces personnel keeping in view the number of levels, age and
retirement profiles of the service personnel. Ministry of Defence raised the
issue that the compact nature of the Defence Pay Matrix may lead to stagnation
for JCOs in Defence Forces and proposed that the Defence Pay Matrix be extended
to 40 stages. The Cabinet decision to
extend the Defence Pay Matrix will benefit the JCOs who can continue in service
without facing any stagnation till their retirement age of 57 years.
(ii)
IOR for Levels 12 A (Lt. Col. and equivalent) and 13 (Colonel and equivalent)
in the Defence Pay Matrix and Level 13 (Director and equivalent) in the Civil
Pay Matrix has been increased from 2.57 to 2.67:
Variable IOR ranging from 2.57 to 2.81 has been applied by the 7th CPC to
arrive at Minimum Pay in each Level on the premise that with enhancement of
Levels from Pay Band 1 to 2, 2 to 3 and onwards, the role, responsibility and
accountability increases at each step in the hierarchy. This principle has not
been applied in respect of Levels 12A (Lt. Col. and equivalent), 13 (Colonel
and equivalent) and 13A (Brigadier and equivalent) of Defence Pay Matrix and
Level 13 (Director and equivalent) of the Civil Pay Matrix on the ground that
there was a disproportionate increase in entry pay at the level pertaining to
GP 8700 in the 6th CPC regime. The IOR for Level 13A (Brigadier and equivalent)
in the Defence Pay Matrix has already been revised upwards with the approval of
the Cabinet earlier. In view of the request from Ministry of Defence for
raising the IOR for Levels 12 A and 13 of the Defence Pay Matrix and requests
from others, the IOR for these levels has been revised upwards to ensure uniformity
of approach in determining the IOR.
(iii) To
give effect to the decisions to extend the Defence Pay Matrix and to enhance
the IORs, the three Pay Matrices – Civil, Defence and MNS – have also been
revised. While doing so, two calculation errors noticed in the MNS Pay Matrix
have also been rectified.
(iv) To
ensure against reduction in pay, benefit of pay protection in the form of
Personal Pay was earlier extended to officers when posted on deputation under
Central Staffing Scheme (CSS) with the approval of Cabinet. The benefit will
also be available to officers coming on Central Deputation on posts not covered
under the CSS.
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