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 7,000 to 18,000 per month. Starting salary of a
newly recruited employee at the lowest level will now be Rs 18,000 whereas for
a freshly recruited Class I officer, it will be Rs 56,100. This reflects a compression
ratio of 1:3.12 signifying that the pay of a Class I officer on direct
recruitment will be three times the pay of an entrant at the 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 Rs10 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 Rs 25-45 lakh for different categories.
— Rates
of Military Service Pay revised from Rs 1,000, 2,000, 4,200 and 6,000 to Rs
3,600, 5,200, 10,800 and 15,500 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 1,470.
However, considering the need for social security of employees, the Cabinet has
asked Ministry of Finance to work out a customised 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 rationalisation,
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.
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