Modifications
in the 7th CPC recommendations on pay and pensionary benefits approved by the
Cabinet on 3rd May, 2017
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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