Cabinet Decision 7th Pay no CGEGIS 1470 or 5000 deduction Arrears will be paid in current financial year All Allowances will continue with existing rates

CGEGIS no 1470 deduction no 5000 deduction

Arrears will be paid in current financial year

All Allowances will continue with existing rates

2.52.57 Multiplication factor

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 7^th 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 5^th CPC, and for 32 months at the time of implementation of 6^th CPC.  However, this time, 7^th 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.

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.

Pay Band, Pay Scale, Grade Pay, Basic Pay, Dearness Allowance, HRA, Transport Allowances For Central Government Employees

PayScale

Before Central Government Implemented Sixth Pay Commission there used to term called Pay Scale. This Pay Scale used to determine the rank and other benefits of the post.

Generally a Pay Scale tells what is the starting Basic, what is the increment amount for every year and what is the last basic in the Pay Scale.

For example take a Pay Scale, for the post of Scientist or Officer

8000-275-13500

here 8000 is the starting basic bay for the post.

275  is the increment amount for the  post every year.

13500 is the last basic pay that post will attain after adding all the increments in the service

when a person joins in the post he will get 8000 as the basic pay

after one year he will given increment 275 so his basic pay will become 8275

like this every year he will get one increment and his basic pay will stop at 13500.

 PayScale was used to determine the rank of the post also. for example most of the 8000-275-13500 pay scale posts are gezetted.

all people who are having payscale 8000-275-13500 are eligible to travel by air for official duty.
all 10000-325-15200 pay scale posts used to get two additional increments like this so on.

GradePay, PayBand
After Implementing Sixth Pay commision Government removed this Pay Scale term. Instead of this Pay Scale Introduced two terms One is Pay band and second one is Grade Pay


Grade Pay will determine the rank of the post and other benefits

Pay band will determine the starting pay and end pay for the post

For example Scientist or Officer entry level will get grade pay 5400 and Pay band 15600-39100


So an officer will get starting pay 15600 (this is called pay in pay band) and Gradepay 5400

now his basic pay will be 15600+5400 (Pay in Payband + Gradepay) i.e 21000 is the basic Pay

Sixth pay commission recommended 3% of  basic pay as increment (unlike fixed amount 275)

after one year 3% of is basic pay will be the increment i.e 21000*3/100 = 630 is the increment amount so his pay in pay in Payband is  15600+630 i.e 16230 and his Basic Pay will be 16230 + 5400

like this pay in payband will go up to 39100 (last amount in pay band 15600-39100)



What is Basic Pay:

Basic Pay is the basic (minimum, without taking into account any additional benefits ) amount a person gets for his post.  Based on this basic pay all other allowances are calculated like Dearness Allowance (DA) , House Rent Allowance (HRA) ,  Transport Allowance (TPA) 

Dearness Allowance : Is the allowance given to accommodate price increases in the market. based on the current goods price DA allowance will be decided. Government will calculate the price increases on all the items (food, vegetables etc) and decides how much DA has to be paid for an employee. Generally this will be a percentage of BASIC PAY. From July 2012 on wards DA is 72% of Basic Pay.

House Rent Allowance :: This allowance is given for paying house rent.  depending on the city you are living it will be some percentage of basic pay. at present for central Govt. employees this is 30% of Basic Pay ( for A1 cities like Delhi, Hyderabad, Bangalore, Mumbai etc).  so if basic pay is 21000 he will get 6300 rupees as HRA.

Transport Allowance is given for accommodating the expenses for traveling between office and house. 
Transport Allowance for posts having Grade Pay 5400 or above is 3200
and for other posts (i.e gradepay less than 5400 ) transport allowance is 1600

Along with Transport allowance DA on Transport allowance also will be paid to the employee. this is to compensate price increase in Transport expenses. current DA is 72% percent so if Transport allowance is 3200 then 72% of 3200 will paid as DA on Transport Allowance.