Wednesday, 27 April 2016

7th Pay Commission Latest News – Minister’s reply on financial outgo and implementation Date

In the event of 7th Pay Commission implementation in 2016-17, additional burden to exchequer would be Rs 1.02 lakh crore, which is 0.7 per cent of GDP

7th Pay Commission Latest News – Minister’s written reply in Parliament on financial outgo and implementation Date – Minister also confirms recent release of additional DA has no impact on the recommendation of 7th Pay Commission

7th Pay Commission likely Implementation date and Financial Implication:

Likely 7th CPC Implementation Date : 7th Pay Commission recommendations to be implemented after approval of the Cabinet on completion of screening of suggestions by Empowered Committee of secretaries which is on the job presently.

Date of Effect of 7th Pay Commission Recommendations:

Subject to acceptance by the government, 7th Pay Commission Recommendations will take effect from January 1, 2016

7th Pay Commission Financial Implication:

Type of Salary Head Total Financial outgo without 7th CPC implementation (In Crore) Total Financial outgo if 7CPC implemented (In Crore) Financial Burden out of 7CPC implementation (In Crore)
Salary 2.44 lakh 2.83 lakh 39,100
HRA 12,400 29,600 17,200
Pension 1.42 lakh 1.76 lakh 33,700
Other Allowances 24,300 36,400 12,100

Total 1,02,100

Financial Express report on Minister’s reply in Rajya Sabha on 7th Pay Commission Report:

Implementation of new pay scales recommended by the 7th Pay Commission is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, government said. The implementation of recommendations of the 7th Pay Commission report, however, would be after approval of the Cabinet on completion of screening of suggestions by a high-level panel of secretaries, the Rajya Sabha was informed.

The implementation of the new 7th Pay Commission pay scales is estimated to put an additional burden of Rs 1.02 lakh crore (or 0.7 per cent of GDP at current market prices) on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016. In a written reply, Minister of State for Finance Jayant Sinha also said that the announcement of Dearness Allowance has no impact on the recommendations of the Pay Commission.

Giving details of financial implications of the recommendations, Sinha said the burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Without the Pay Commission recommendations, the outgo would have been Rs 2.44 lakh crore.

The outgo towards HRA will increase by Rs 17,200 crore to Rs 29,600 crore. The outgo on pension front will be Rs 1.76 lakh crore (increase of Rs 33,700 crore) and on other allowance will be Rs 36,400 crore (up Rs 12,100 crore).

The Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission was set up in January. The recommendations of the 7th Pay Commission report will have bearing on the remuneration of 47 lakh central government employees and 52 lakh pensioners.

Changes in National Pension System (NPS)

Changes in National Pension System (NPS)

The Government has proposed the following in the Finance Bill, 2016 with regard to the National Pension System (NPS):
i. Allowing 40 per cent of the NPS corpus tax exempt on lump sum withdrawal.
ii. Waiving service tax on the NPS corpus utilized for purchase of annuity.
iii. The amount receivable by the nominee in case of death of the subscriber covered under NPS has been made tax exempt.
iv. One-time portability without any tax implication has been allowed to the subscriber for shifting from recognized provident fund to NPS.
v. One-time portability without any tax implication has been allowed to the subscriber for shifting from superannuation fund to NPS.
As per the provisions of the Finance Bill, 2016, 40 per cent of the pension corpus under NPS is proposed to be tax exempt on lump sum withdrawal. Also, the proposal in the Union Budget, 2016-17 for taxation of 60 per cent of provident fund corpus under the Income Tax Act, 1961 has been withdrawn by the Government. Employees’ Provident Fund (EPF) remains an Exempt Scheme.

However, EPF and NPS are different schemes available to separate categories of subscribers and they are not comparable on one-to-one basis.

This information given by Shri Bandaru Dattatreya, Minister of State (IC) for Labour and Employment, in reply to a question in Rajya Sabha today.

PIB

FM: Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector

FM: Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector

The Union Finance Minister, Shri Arun Jaitley said that the Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector especially in case of Public Sector Banks (PSBs). The Finance Minister said that there are two categories of defaulters, viz. those who are unable to pay back due to economic slowdown both in domestic and global market and other reasons outside their control as well as wilful defaulters including loans sanctioned without due diligence by the banks. The Finance Minister said that the Government has taken various measures to deal with both these categories of defaulters. The Finance Minister Shri Jaitley was making his Opening Remarks at the Second Meeting of the Consultative Committee attached to the Ministry of Finance on the subject: “NPAs in Banking Sector” here today.

The Finance Minister Shri Jaitley further said that in order to deal with default due to economic slowdown, the Government has taken various measures to revive the stressed sectors which mainly include steel, textiles, power and roads among others. Shri Jaitley said that the Government has also done recapitalization of banks by providing Rs. 25,000 crore in the last year Union Budget 2015-16 as well as in this year’s budget 2016-17. He said that transparency and professionalism has been brought in appointment process for top management positions in the PSBs including Chairmen and Managing Directors. He said the Government has taken various measures to make the management professional, has given full autonomy to the banks in taking commercial decisions without any interference from the Government.

The Finance Minister Shri Jaitley said that Bankruptcy Law has been cleared by the Joint Parliament Standing Committee and is likely to be discussed in the current Budget Session of the Parliament. The Finance Minister also said that SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient. The Finance minister said that wherever it was observed that number of cases in which action taken by the banks against guarantors for recovery of defaulted loans is insufficient, the Government has advised the banks to take action against guarantors in the event of default by borrowers under relevant Sections of SARFAESI Act, Indian Contract Act and RDDB & FI Act. The Finance Minister said that a direction to this effect has been issued to the banks last month. The Finance Minister also highlighted the various measures taken by the Government for revival of stressed sectors such as steel, road, power and textile sectors among others.

Later the Members of the Consultative Committee gave their suggestions with regard to recovery of loans and bringing NPAs under control. Members suggested that there is need for bringing more transparency in the system and list of all the defaulters whose loans have been written off by the PSBs be made public. They asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities. Some members appreciated the Government’s effort to make the appointment process for the top management positions of banks professional. Some members also suggested that there is need for restructuring of agricultural loans in order to help the farmers. Members also suggested that there should be no employment cut due to any amalgamation or merger of banks. Members asked the Government to ensure level playing field to all Indian entrepreneurs across the board. They suggested that due to wilful default by some prominent business men, others may not be considered and treated in a similar fashion. Some members suggested that a committee be constituted to finalise recovery process in case of loans given to big corporate houses by various PSBs.

The Members of the Consultative Committee who participated in the aforesaid Meeting include Shri Anirudhan Sampath, Shri Baijayanta Jai Panda, Shri Dilip Kumar Mansukhlal Gandhi, Shri Kailkesh Narayan Singh Deo, Smt. Poonam Mahajan, Shri PrabhatsinhPratapsinh Chauhan, Shri Ram Charitra Nishad, Shri Sriram Malyadri, Shri Subhash Chandra Baheria, Smt. Supriya Sadanand Sule, Shri Suresh Chanabassappa Angadi (all members of Lok Sabha); Shri Anil Desai, Shri Digvijaya Singh, Dr. K.P. Ramalingam, Shri Rajkumar Dhoot, Shri Ranvijay Singh Judev, Shri Satish Chandra Misra, Kumari Selja and Shri Sukhendu Sekhar Roy (all members of Rajya Sabha).

Along with the Finance Minister, the Minister of State for Finance Shri Jayant Sinha, Shri Ratan P. Watal, Finance Secretary, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Dugal, Secretary, Financial Services, Shri Neeraj Kumar Gupta, Secretary, DIPAM, Dr. Arvind Subramanian, Chief Economic Adviser (CEA), and other senior officers of the Ministry of Finance attended the aforesaid Consultative Committee Meeting.

PIB

7th Pay Commission – Indian Army Chief and his Counterparts in the IAF and the Navy will draw more salary than the top General and Equivalent in the US based on Purchasing Power Parity (PPP)

7th Pay Commission – Indian Army Chief and his Counterparts in the IAF and the Navy will draw more salary than the top General and Equivalent in the US based on Purchasing Power Parity (PPP)

If the recommendations of the 7th pay commission are implemented, the Indian Army chief’s annual salary will jump to $189,482 (in PPP terms), almost $8,000 more than what a general and equivalent ranks draw in the US. The huge salary hikes will apply equally to civilian officers too.

7th Pay Commission – These conclusions are, however, equally applicable to civilian employees of the government who are similarly placed.

7th Pay Commission recommendation – For the first time, the Indian Army chief and his counterparts in the IAF and the Navy will draw more salary than the top general and equivalent in the US based on purchasing power parity (PPP) terms when the recommendations of the 7th Central Pay Commission are implemented.
A comparison drawn by the Institute for Defence Studies and Analyses (IDSA), a defence ministry think tank, on the pay packets of Army chiefs and equivalent in the US, the UK and India said a general and equivalent in the US was paid $181,500 per annum (in PPP terms). The salary in the UK for similar ranks was $269,868. In India, the three services chiefs, who enjoy pay equivalent to the Cabinet secretary, received $140,520.

If the recommendations of the 7th pay commission are implemented, the Indian Army chief’s annual salary will jump to $189,482 (in PPP terms), almost $8,000 more than what a general and equivalent ranks draw in the US. The huge salary hikes will apply equally to civilian officers too.

India’s annual per capita income is $5,833 (in PPP terms) while it is $54,630 in the US and $39,137 in the UK.

The purchasing power parity conversion factor, used worldwide to compare income levels in different countries, is “the number of units of a country’s currency required to buy the same amounts of goods and services in the domestic market as a dollar would buy in the US”.

The pay panel observed, in light of protests by the three Service chiefs asking for more money and perks, that “defence service officers and JCO/ORs in India, based on 6th CPC pay scales, are placed quite well in terms of pay, even in relation to defence personnel in countries like US and UK, where the GDP per capita in PPP terms for the country as a whole is significantly higher than that of India”.

These conclusions are, however, equally applicable to civilian employees of the government who are similarly placed. The pay panel’s analysis did not take into account the augmentation of pay being recommended by the 7th CPC.

The IDSA, an autonomous institution funded by the government, was in 2015 commissioned by the Pay Commission to study how well the military and the generals were paid.

Source: TOI

7th Pay Commission – Government Plans to axe 52 out of 200 allowances

Besides recommending that 52 allowances be abolished, the 7th pay Commission suggested that another 36 be subsumed in an existing allowance or in new allowances it proposed.

7th Pay Commission – Government Plans to axe 52 out of 200 allowances – The 7th Pay Commission found inadequate the justifications offered by the Ministries for these allowances.

Secret allowance, family planning allowance, desk allowance, cash handling allowance, metropolitan allowance and headquarters allowance are among 52 of the nearly 200 allowances which the government could scrap soon.

The 7th Pay Commission found inadequate the justifications offered by the Ministries for these allowances. The government was asked to suggest rationalisation of a variety of allowances. A committee is examining the Commission’s recommendations.

The 7th pay Commission found the entire system of nearly 200 allowances “haphazard”. There are 13 for travel, 14 for additional duty, 51 for risk and hardship, nine for uniform, 4 for good services, 5 sumptuary allowances, 2 for training and 3 for knowledge update. Many were meagre cash payments and lost significance, it concluded. Rejecting the demand for doubling the family planning allowance — ranging from Rs. 210 to Rs.1,000 a month depending on grade pay — for those who adopt family planning norms after one child, the Commission recommended that it be abolished as a separate allowance was no longer needed.

Also to be abolished is the “meagre and outdated” Rs. 90 a month cycle allowance to postal officials. The briefcase allowance, paid once in three years and covering expenditure of up to Rs.10,000 on handbags, could be enhanced.

Allowances are paid to employees — both in civil and defence jobs — over and above the basic pay, either as a percentage of it, or as a specified amount, which usually varies with employees’ “level or status”. Children education allowance is an exception for which the absolute amount is the same across all ranks. Besides recommending that 52 allowances be abolished, the 7th pay Commission suggested that another 36 be subsumed in an existing allowance or in new allowances it proposed.

While allowances for newspapers, Internet and mobile phones are paid in the private sector, government employees seem to be receiving a whole bunch of top-up payments, including in cash, for simply carrying out their job.

Arguing that responding to emergencies is part of the duties of any government servant, it recommended the scrapping of breakdown allowance given by the Ministry of Railways. Similarly, it found no need for secret allowance paid every month as a flat sum for dealing with ‘Top Secret’ in the Cabinet Secretariat or metropolitan allowance for Delhi Police personnel on account of “hardship faced in a metropolitan” area. The present rates are Sub-Inspector Rs.180 a month and Constable, Head Constable and Assistant Sub-Inspector Rs. 120.

The axe could also fall on headquarters allowance (Rs. 225 a month) paid to officers of Organised Group A Service in the Department of Telecom and some other Ministries for postings at the headquarters.

With growing emphasis on banking, it recommended abolishing cash handling allowance for cashiers working in Central government departments. It is paid at rates starting from Rs. 230 for disbursing sums less than Rs. 50,000 on an average in a month and goes up to Rs. 900 for sums in excess of Rs. 10,00,000.

Investigation allowance to attract talent from other Ministries to the Serious Fraud Investigation Office of the Ministry of Corporate Affairs is another such example.

Source: The Hindu

Unions to protest lowering provident fund interest rate on Apr 29

Trade-unions-provident-fund
Unions to protest lowering provident fund interest rate on Apr 29

Trade unions today gave call for day-long nationwide protest on Friday against Finance Ministry’s decision to fix 8.7 per cent interest rate for provident fund subscribers, lower than 8.8 per cent decided by the EPFO.

“While condemning such arrogant anti-worker approach of the government, the central trade unions call upon the workers and the trade unions irrespective of affiliations to protest against the same by holding demonstrations, meeting, etc on April 29, 2016, throughout the country,” ten central trade unions said in a joint statement today.

The unions include Indian National Trade Union Congress, All India Trade Union Congress, Centre of Indian Trade Unions and All India United Trade Union Centre.

However, RSS-backed Bharatiya Mazdoor Sangh (BMS) has opted out of the proposed stir.
When contacted, BMS General Secretary Virjesh Upadyay said, “BMS will hold a nationwide protest tomorrow.”

The unions strongly denounce the “unilateral reduction” in interest rate on Employees Provident Fund (EPF) from 8.8 per cent to 8.7 per cent, ignoring the unanimous decision of tripartite Central Board of Trustees (CBT) of EPFO, the statement added.

CBT, which is headed by the Labour Minister, is the apex decision making body of the Employees Provident Fund Organisation (EPFO).

“On February 16, 2016, the CBT of EPFO, in its meeting chaired by Labour Minister (Bandaru Dattatreya) unanimously decided the interest rate on EPF at 8.8 per cent as an interim measure with an indication of increasing it further in view of availability of funds generated by EPF,” it said.

But the Finance Ministry, imposed its decision to reduce the interest rate further to 8.7 per cent without even consulting the CBT, it added.

Yesterday, Dattatreya told Lok Sabha: “The CBT, at its meeting held in February 2016, had proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of EPF subscribers for 2015-16. The Finance Ministry has, however, ratified an interest rate of 8.7 per cent.”

The interest rate for 2013-14 and 2014-15 was fixed at 8.75 per cent.

It is probably for the first time that Finance Ministry has overruled the decision of the Central Board of Trustees (CBT) on the interest rate.

PTI

Jharkhand government increased the dearness allowance (DA) of its employees by six per cent.


Jharkhand-dearness-allowance-6percent-hike

Jharkhand government increased the dearness allowance (DA) of its employees by six per cent.



The decision, which was taken at the cabinet meeting chaired by Chief Minister Raghubar Das, would be applied retrospectively from January 1 this year.

The cabinet also approved introducing Centre’s ‘Pradhan Mantri Fasal Bima Yozana’ in the state.

It also gave nod to setting up dialysis centres through public private partnership in Bokaro, Chaibasa, Dhanbad, Dumka, Gumla, Hazaribagh, Jamshedpur and Palamau districts.

PTI

7th Pay Commission award to put extra burden of Rs 1.02 lakh crore in FY 16-17

7th Pay Commission award to put extra burden of Rs 1.02 lakh crore in FY 16-17

Implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, government said today.

The implementation of recommendations of the 7th Pay Commission, however, would be after approval of the Cabinet on completion of screening of suggestions by a high-level panel of secretaries, the Rajya Sabha was informed today.

The implementation of 7th Pay Commission award is estimated to put an additional burden of Rs 1.02 lakh crore (or 0.7 per cent of GDP at current market prices) on the exchequer in 2016-17. Subject to acceptance by the government, they will take effect from January 1, 2016.

In a written reply, Minister of State for Finance Jayant Sinha also said that the announcement of Dearness Allowance has no impact on the recommendations of the Pay Commission.

Giving details of financial implications of the recommendations, Sinha said the burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Without the Pay Commission recommendations, the outgo would have been Rs 2.44 lakh crore.

The outgo towards HRA will increase by Rs 17,200 crore to Rs 29,600 crore. The outgo on pension front will be Rs 1.76 lakh crore (increase of Rs 33,700 crore) and on other allowance will be Rs 36,400 crore (up Rs 12,100 crore).

The Empowered Committee of Secretaries headed Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission was set up in January.

The recommendations of the Pay Commission will have bearing on the remuneration of 48 lakh central government employees and 52 lakh pensioners.

PTT

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