HIGHLIGHTS OF 7TH CPC
APPROVED BY CABINET TODAY
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.
//pib//