Tuesday, 17 May 2016

7th Pay Commission Pay hike – Financial Express ideas

The financial Daily advises Central Government Employees to prudently spend the extra money in their hand in the form of 7th CPC pay and allowances increase.

7th Pay Commission Pay hike – Financial Express ideas for effectively utilising the additional payout in provisioning for Emergency fund creation, financial goals, asset allocation, long term and short term investments etc.

7th Pay Commission: While you wait for the payout, FeMoney advises you to give a hard look at your entire finances and then decide on how you want to go about spending the money.

If you are a central government employee, you must be eagerly awaiting the notification of the 7th Pay Commission, which might come close after the declaration of the state election results on May 19. The payout could be substantial with salary hike and arrears adding up to a Rs 1.02 lakh crore impact on government finances.

The 7th Pay Commission recommendation, which are to come into effect from January 1, 2016, will enlarge the pay package of 47 lakh central government employees and 53 lakh pensioners. The Commission has recommended a 23.55 per cent hike in pay and allowance. While pay will go up by 16 per cent, increase in allowance will be 63 per cent and increase in pension 24 per cent.

The huge payout by the government has already made the Reserve Bank of India worried over the its impact on inflation. In its recent credit policy, the central bank said that it expect inflation to go up by 1-1.5 per cent on account of the increased money in hand of central government employees.

So if you are one of the beneficiaries of the 7th Pay Commission, what should you do with the bonanza that is expected to come soon? As is natural with such one-time windfall coming your way, there would be that temptation of splurge, plan for an expensive holiday or buy that new car that you have been eyeing for some time.

However, while you wait for the payout, FeMoney advises you to give a hard look at your entire finances and then decide on how you want to go about spending the money.

Financial advisor, Sanjeev Govila, CEO, Hum Fauji Initiative, believes one of the priorities should be to create an emergency fund out of the arrears that one gets in lump-sum. In his five-point advise to Central Government employees Govilla says one should keep finanical keep financial goals and proper asset allocation in mind while dealing with the money. “It is absolutely essential that the bulk money which one gets as 7th Pay Commission arrears should go for meeting financial goals. And that is where the asset allocation and risk attitude should flow from,” Govila told FeMoney.

Here are Govila’s 5-point suggestions on dealing with the 7th PayCommission bonanza:
Emergency fund creation: Creation of emergency fund out of the payout is the prime requirement. Even before looking at life’s goals one has to be prepared for unforeseen events. Most of us remain oblivious to this and do not plan for it. This results in costly loans, embarrassing borrowings from friends and relatives or emptying long-term coffers. As a thumb-rule, about six month’s expenses should set aside for an emergency fund. The question is where to keep it? It could ideally be in multiple small bank fixed deposits or liquid mutual funds.

Cater to life’s financial goals: Life’s goals can be divided into critical goals and lifestyle goals. Critical goals are those which have to be met at all costs, like children education and marriage, retirement and medical expenses, while the lifestyle goals, like changing your car, vacations, leisure and passion activities.

Proper asset allocation: Spreading investment across various assets to minimise risks should be considered the final frontier of life’s financial planning. Whatever wealth creation or destruction takes place finally, is generally due to correct or incorrect asset allocation. An asset allocation directly results as a delicate balance between your future money requirements, indicating the type of investment avenues you should invest in, and your risk attitude and risk taking capacity.

Decide between long-term and short term: As a general rule, equity is for long-term and debt for the short term, with real estate and gold figuring somewhere in between. Investment in real estate and gold should depend on the future outlook of both these asset classes as prices of these physical assets are dependent on their seasonal cycles.

Assesment of risk-taking ability: Risk-taking is erroneously tagged to age, even by many financial planners. However, it is both an attitude and the capacity to take risks, the latter being dictated more by your current financial well-being. Hence, it is always better to go in for a risk-profiling rather than guessing the same by ‘indications’ of behaviour.

Source: Financial Express

EPFO disbursed Rs. 47,630 crore as member benefits and Rs. 8,200 crore as monthly pensions in 2015-16

EPFO disbursed Rs. 47,630 crore as member benefits and Rs. 8,200 crore as monthly pensions in 2015-16

In 2015-16, EPFO disbursed approximately Rs. 47,630 crore as member benefits and Rs. 8,200 crore as monthly pensions.

To monitor the status of enrolment of contractual employees especially in municipalities, EPFO has taken steps towards putting in place a system where principal employers including government bodies who enroll workers directly or through contractors can view details of contractors including the amount paid towards PF dues on real time basis. Now, EPFO will be in a position to compare the PF dues reimbursed to contractors and the PF dues actually remitted by contractors. Mismatch in the amounts would indicate possible specific evasion that can be followed up towards seeking compliance. A facility already exists in public domain wherein all principal employers can check the amounts remitted by contactors’ establishments. Any person through this report can also check if her / his name appears in the list of employees submitted by contractor to EPFO on a monthly basis. EPFO is also in the process of digitizing compliance reporting system. It is expected that reporting in Compliance area shall be online and real time by the second quarter of this financial year.

The process of seeding EPS pensioners’ data with Aadhaar is underway in EPFO. While seeding the data, it has been noticed that in certain cases there is data mismatch between EPF data and Aadhaar data in respect of date of birth and name of pensioner. To rectify it, pensioners / members are being advised to correct either their details provided to EPFO offices or to correct the details given in Aadhaar, whichever is correct.
It is also seen that a number of online transfer applications by members are pending with the employers for attestation and verification of member details by the employers Field offices of EPFO have been directed to take up the matter with employers to clear this on priority.

On the occasion of International Labour Day, EPFO launched a special mission consolidation drive “One –Employee-One – EPF Account”. The drive is to consolidate multiple accounts of members so that they are able to access variety of IT enabled services such as e-mail / SMS alerts, access to e-passbook at their leisure. Shri Bandaru Dattatreya, Union Minister of State for Labour & Employment (Independent Charge) while presiding over the function marking International Labour Day stated that this drive would result in EPF members having lifelong one EPF account and multiple conveniences. The Universal Account Number (UAN) that is Aadhaar seeded will consolidate multiple past service accounts, across various spells of employment of an EPF member.

The month of April also saw withdrawal of notification dated 10th February 2016 on amendment in Paragraph 68 NN, 68-O and 69 and insertion of new Para 68 –NNNN in the EPF Scheme, 1952. The interest rate of 8.8% to be credited to members’ accounts for the financial year 2015-16 was also finalized by the Government as recommended by the Central Board of Trustees, EPF.

PIB

References/Representations/Court Cases in various Ministries/Departments/ Organisations for grant of MACPS benefits in the promotional hierarchy

References/Representations/Court Cases in various Ministries/Departments/ Organisations for grant of MACPS benefits in the promotional hierarchy – reg.

No. 22034/04/2013-Estt.(D)
Government of India
Ministry of Personnel Public Grievance & Pensions
Department of Personnel & Training
* **
North Block, New Delhi
Dated: 17.05.2016
Office Memorandum

Subject :- References/Representations/Court Cases in various Ministries/Departments/Organisations for grant of MACPS benefits in the promotional hierarchy – reg.

In continuation of Department of Personnel Training’s earlier O.M. of even no. dated 20.01.2016 and dated 01.03.2016 on the above mentioned subject, the undersigned is directed to forward a copy of the decision dated 28.04.2016 of Hon’ble CAT, Calcutta Bench in OA No. 351/00195/2014 filed by Shri S.H.K. Murti & Others Vs. UOI &Ors whereby the demand of the applicant for MACP in promotional hierarchy has been dismissed, for necessary action and compliance. The Hon’ble Tribunal in the aforesaid decision dated 28.04.2016 has held that the MACP benefit would be given in the hierarchy of next higher Grade Pay and not in Grade Pay of promotional hierarchy which will be payable on actual promotion.

2. All Ministries/Departments are requested to upload it on their websites for wider publicity.
(G.Jayanthi)
Director (E-I)
Phone No. 23092479
All Ministries/Departments of the Government of India.

Circular

7th Pay Commission Latest News – Issues to be addressed

7th Pay Commission Latest News – Issues to be addresse

It is a general view of all Central Government Employees that certain allowances, reimbursement and advances which have been abolished or restricted in 7th CPC report are to be allowed to continue
7th-CPC-Issues

7th Pay Commission Latest News – Employees of Accounts and Audit Department raises certain Common issues in respect of 7th Pay Commission Recommendations which are applicable to all Central Government Employees

7th Pay Commission Latest News – As per representation made by the employees of Accounts and Audit Department certain common issues in respect of allowances, Interest Free Advances and Interest bearing Advances

Issues related to Allowances:

House Rent Allowance:
Recommendation of 7th Pay Commission:

The Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 percent of the new Basic Pay for Class X, Y and Z cities respectively. The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent”

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?

In para 8.7.14, the Commission took note of the link between increase in HRA and increase in house rent after implementation of recommendations of 6th CPC. There was a sharp rise in the index from the first half of 2009, immediately following 6th CPC recommendations. There is likely to a similar rise in House Rent after implementation of recommendations of 7th CPC. Hence the existing percentage of House Rent may be retained at the rate of 30 percent, 20 percent and 10 percent of the new Basic Pay for Class X, Y and Z cities respectively.

Composite Transfer and Packing Grant (CTG)

Recommendation of 7th Pay Commission:
The Commission recommended that CTG should be paid at the rate of 80 percent of last month basic’s pay. However, for transfer to and from the island territories of Andaman, Nicobar and Lakshadweep, CTG may continue to be paid at the rate of 100 percent of last month’s Basic Pay.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
As the labour charges and cost of packing materials are continuously rising, the CTG may continue to be paid at the rate of 100 percent of last month’s Basic Pay.

Reimbursement of staying accommodation charges:
Recommendation of 7th Pay Commission:
The commission made flowing recommendations:

Level Level Ceiling for
Reimbursement (Rs.)
14 and above 7500
12 and 13 4500
9 to 11 2250
6 to 8 750
5 and below 450

For levels 8 and below, the amount of claim (up to the ceiling) may be paid without production of vouchers against self-certified claim only. The self- certified claim should clearly indicate the period of stay, name of dwelling, etc. The ceiling for reimbursement will further rise by 25 percent whenever DA increases by 50 percent. Additionally, it is also provided that for stay in Class‘X’ cities, the ceiling for all employees up to Level 8 would be Rs.1,000 per day, but it will only be in the form of reimbursement upon production of relevant vouchers.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
The main objective of the Audit Department is to carry out Audit function which entails long periods of stay out of headquarters. Consequently, officials at pay level 5 to 11 have to visit small towns (at Block/Sub-division level). For such places, as per recommendations of the 7th CPC, officials of pay level 8 and below will be entitled to the claim without production of vouchers (ie. against self-certified claim only), where as officials of the pay level 9 and above will have to produce vouchers for the similar claim.

To eradicate such anomalous situation, it is submitted that claims, as admissible upto pay level 8, may be paid without production of vouchers against self-certified claim to all pay level officials.

Reimbursement of travelling charges:
Recommendation of 7th Pay Commission:
The commission made following recommendations:

Level Level Ceiling for
Reimbursement (Rs.)
14 and above AC Taxi charges up to 50 km
12 and 13  Non-AC Taxi charges up to 50 km
9 to 11 Rs. 338 per day
6 to 8 Rs. 225 per day
5 and below Rs. 113 per day
Similar to Reimbursement of staying accommodation charges, for levels 8 and below, the claim (up to the ceiling) should be paid without production of vouchers against self certified claim only.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
In the same analogy, as mentioned against reimbursement of staying accommodation charges above, it is submitted that claims, as admissible upto pay level 8, may be paid without production of vouchers against self-certified claim to all pay level officials.

Family Planning Allowance:-
Recommendation of 7th Pay Commission:
The Pay Commission has recommended to abolish the Family Planning Allowances

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
This is an incentive for promoting small family norms and therefore, it needs to be continued.

Interest free advances:
Medical Advance:
Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of Medical Advance.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
As per the existing practice, medical advance is paid to an employee to the extent of 90% of the estimated cost of treatment in case of treatment of self and dependents. Cost of treatment for illness particularly of critical/life threatening ailments, such as heart transplant/ cancer/ kidney transplant etc., even under CGHS rules, is extremely expensive. It is also pertinent to note that many hospitals even in emergent situations insist on advance payment before commencing treatment/surgery. It is very difficult for a low paid employee such as MTS/LDC/UDC etc or even for group ‘B’ and ‘A’ officers to make available large amounts required for medical treatment. Without medical advance, an official will have great difficulty in getting proper/appropriate medication.
Therefore, it is submitted that medical advance may be continued with as per existing practice.

TA Advance:
Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of TA Advance.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
The main function of IA &AD is auditing of Central/State Government/ PSUs etc. These auditee units are spread across the states down to the block/Panchayat level. In order to discharge audit responsibility, touring is a continuous requirement. It is not an occasional tour for short period, expenditure of which can be met out by the individual and reimbursement claimed subsequently. The officials have to be on tour continuously for upto a quarter (i.e 03 months) or even more.

For an official at pay level 6(Senior Auditor), as per the recommendations of the 7th CPC, the tour allowance for a day works out to Rs. 1770/- (Rs. 750 for accommodation+225 for travelling +Rs. 800 for food bills) and for a month it would be Rs. 53250/-. Besides, he has to incur expenditure for to and fro (i.e Hqrs. to field office and back) train/ bus fare. Monthly salary of a pay level 6 employee, as per recommendations of 7th CPC is Rs. 35400/-. As is clearly brought out, the likely monthly expenditure on tour will be significantly more than the employees’ monthly salary.

Therefore, advance is necessary to defray tour expenditure for performing official duties. This will create huge administrative issues in the department and adversely impact the Audit functions.
In view of the above, TA Advance, requires to be continued and paid as per extant provisions.

LTC Advance:
Recommendation of 7th Pay Commission:

The pay Commission has recommended abolition of LTC Advance.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?

Under LTC facility the expenses incurred on travel to visit the destination is reimbursable. Advance upto 90% of expenses on travel to visit the destination place is admissible. This amount serves as great help to the employees to undertake the journey in arranging train/air tickets. Without this advance, the employees will find it difficult to purchase train/air tickets for his family Besides travelling expenses, an official has to incur expenditure on account of Boarding and lodging/local travel also.

As per the recommendation of 7th CPC, officials of pay level 05 to 08 are entitled to travel by train. The travel tickets for family of four will cost more than Rs. 18000/- for a journey from Delhi to Thiruvananthapuram. Further, for level 9 and above the return tickets in economy class for the same destination i.e. Delhi to Thiruvananthapuram will cost more than Rs. 2 lakh.

A government official cannot afford such a huge amount to spent upfront for performing journey for availing home town LTC or All India LTC. Hence LTC advance is required to be continued as per extant provisions.

Bicycle Advance, Warm Clothing Advance:
Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of these Advances.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?

These advances may continued to be paid as per existing rules as these are admissible only to low paid employees upto Grade pay of Rs. 2800 /- (Level 5)
Festival advance, advance in the event of natural calamities like Flood, Drought, Cyclone etc.

Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of these Advances.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
These advances may continue to be paid as per existing rules as these interest free advances are payable to Group ‘B & C’ employees as a welfare measure.
Advance of TA to a family of a deceased Govt. employee

Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of this Advance.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
This advance may continue to be paid as per existing rules as this helps the family of a deceased Govt. employee to cope with immediate expenses for travel to their place of settlement.

Interest Bearing Advances:-
Motor Car/Motor Cycle Advance.
Recommendation of 7th Pay Commission:
The pay Commission has recommended abolition of this Advance.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
The Pay Commission has abolished the Motor Car/Motor Cycle Advance on the plea that there are several schemes available in market. There are several schemes in the markets for House Building Advance also. However, the Pay Commission has not only recommended to continue with HBA but also proposed to increase the ceiling. Therefore, the plea of the commission to discontinue MCA on the basis that schemes for purchase of vehicles are available in the market does not hold good.

Further, several documentation/guarantees are required for seeking the said advances from the market. As it is convenient and safe for a Government Servant to avail such advances from the office without any hassles, these interest bearing advances may be continued as per the extant provisions.

Fixed Medical Allowance (FMA) to Central Government Pensioners
Recommendation of 7th Pay Commission:
The Commission has maintained status quo of the Fixed Medical Allowance which is presently paid @ Rs. 500/- per month.

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
The costs have increased for medicines, consultations fees and Pathological Tests required for day to day medical treatment. This has risen at a much steeper rate than that of the General Price Index. A large number of pensioners are residing in remote areas or villages having no access to CGHS dispensaries and as such are wholly dependent on the paltry amount of Fixed Medical Allowance for day to day treatment.. Therefore it needs to be revised to at least Rs. 2000/- per month.

Modified Assured Career Progression Scheme (MACPS) :
Recommendation of 7th Pay Commission:
Assured Career Progression was introduced in 1999 with a view to grant at least two financial up gradations at an interval of 12 and 24 years where officials are stagnating for want of promotion. It was further modified to 03 financial up gradations on the recommendations of the 6th CPC. However, the 7th CPC recommended continuing with the same without any change. Also the bench mark has been increased from ‘Good’ to ‘ Very Good’

What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
There should be at least four financial upgradations in entire service career of an employee at regular interval of 8 years. Hence, the MACPS may be granted to an employee after completion of 8, 16, 24 and 32 years of service.

Further, the bench mark for financial up gradation may be continued as per the existing practice – i.e. the bench mark prescribed for the post for promotion.

Transport Allowance (TPTA)
Recommendation of 7th Pay Commission:

The 7th CPC has just revised the Transport Allowance by merging 125% of DA with the existing rate of transport allowance. The revised rates are as mentioned below:

Pay level Proposed  (Higher TPTA Cities) Proposed  (Other TPTA Cities)
9 and above 7200+DA 3600 +DA
3 to 8  3600+DA 1800 + DA
1 and 2 1350+DA 900 + DA
What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
The following is proposed for the revised Transport Allowance (TPTA)
Pay level Proposed  (Higher TPTA Cities) Proposed  (Other TPTA Cities)
9 and above 10000 + DA 5000 + DA
3 to 8  5000 + DA 2500 + DA
1 and 2 2500 + DA 1250 + DA

Child Care Leave (CCL):
Recommendation of 7th Pay Commission:
The 7th CPC has proposed that CCL should be granted at 100 percent of the salary for first 365 days, but at 80 percent of the salary for the next 365 days. However, CCL has been extended to single parent also.
What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
It is proposed that the CCL be paid at 100 percent of salary for the entire period.

Children Education Allowance (CEA):
Recommendation of 7th Pay Commission:
The Commission has recommended CEA @ Rs. 2250/- per month and Hostel Subsidy @ Rs. 6750/- per month.
What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
Keeping in view the steep rise in tuition fees, cost of stationery, Books, Uniform etc. the CEA and Hostel Subsidy may be increased @ Rs. 3000/- and @ Rs. 8000/- per month respectively.

Special Casual Leave (SCL):
Recommendation of 7th Pay Commission:

SCL is granted to employees to cover their absence from duty for various occasions like sports events, cultural activities, participation in Republic Day Parade, voluntary blood donation, Trade Union meetings, etc. Full pay is granted during SCL and it can be sanctioned with retrospective effect also.
The Pay Commission has expressed its concern at the widespread use of SCL as a means of getting away from duty. However, because of the extensive scope and case specific nature of this leave, no concrete recommendations have been made.
It has suggested that the government may, however, consider the following: (a) Review the purposes for which SCL is presently granted.

(b) Limit the number of purposes for which an employee can be granted SCL in a year.

(c) Limit the total number of days that an employee can be granted SCL in a year.
What is to be changed / taken care of in this issue on implementation of 7th Pay Commission Report ?
Since SCL is granted to employees to cover their absence from duty for various occasions like sports events, cultural activities, participation in Republic Day Parade, voluntary blood donation, Trade Union meetings/ casting votes in their constituency, it may be continued to be granted as per existing practice.

Source: Indian Accounts and Audit Department

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