Wednesday, 29 June 2016

NFIR Press Note : Expressed serious disappointment over the Government’s decision on 7th Pay Commission minimum wage

NFIR Press Note : Expressed serious disappointment over the Government’s decision on 7th Pay Commission minimum wage

The National Federation of Indian Railwaymen (NFIR)’s General Secretary expressed serious disappointment and unhappiness over the Government’s decision on minimum wage. Although there is justification of upward revision of minimum wage, the Government has not done justice to the employees. Similarly, the multiplier factor has not adequately been revised, Dr. Raghavaiah General Secretary NFIR said.

Dr. Raghavaiah further said that as already decided by the NJCA, Railway employees will go on strike from 6:00 AM of 11th July 2016.

Source : NFIR

NFIR : 7th CPC Recommendation totally disappointing

NFIR : 7th CPC Recommendation totally disappointing.

NFIR
NATIONAL FEDERATION OF INDIAN RAILWAYMEN
3,Chelmsford Road, New Delhi – 110 055
Affiliated to:
Indian National Trade Union Congress (INTUC)
International Transport Workers Federation (ITF)

No.IV/NJCA(N)/2014/Part II
Dated: 29-06-2016
The General Secretaries of
Affiliated Unions of NFIR

Brother,

Sub: 7th CPC Recommendations – reg.

Cabinet’s decision on minimum wage is totally disappointing as no improvement has been made. Equally in multiplier factor, there is no improvement.

As already decided, the JCM constituent organizations will be compelled to go on strike.

NJCA will meet very soon (either today or tomorrow) to take stock of the situation and issue directions.
Yours fraternally,
sd/-
(Dr.M.Raghavaiah)
General Secretary
Source: NFIR

Unhappy with 7th Pay Commission hike, government employees to go on strike on July 11

Unhappy with 7th Pay Commission hike, government employees to go on strike on July 11

Govt Employees Strike

The 7th Pay Commission report that received a nod from the Cabinet chaired by Prime Minister Narendra Modi, will levy a pay hike of 23.55%.
Nearly 32 lakh central government employees have announced they will be going on a strike starting July 11, protesting against the 23.55% salary hike approved by the Cabinet on Wednesday, Zee Business channel news frash indicated.

Earlier in the day the Cabinet approved the recommendations put forth by the 7th Pay Commission panel, which will impact the salaries of one crore government employees.

Under the final approval, the basic salary of government employees will be hiked by 15% and the overall 7th Pay Commission pay hike stands at 23.55%. The central government employees, unhappy with the rate of pay hike had warned earlier that they will stage a strike on July 11, demanding a pay rise of atleast 30%.

At current levels, the salary hike is the lowest in 70 years, but a senior government official stated tight fiscal situation as the reason, stating that a provision to increase it to 18-20% was still open.

On July 4, M Krishnan, Secretary General of the Confederation of Central Government Employees and Workers issued a notice to the employees who are member and affiliated organisations regarding the pursuance of an indefinite strike from July 11 2016.

Krishnan had earlier said that if the government adopts delayed tactics or issue unilateral orders rejecting our demands, then confrontation shall become inevitable.

The Confederation of Central Government Employees & Workers on June 27, also put up a notice calling for an indefinite strike from July 11 and demonstrations and rallies in front of all important government offices and centres from July 4 to July 10.

Source: dnaindia

Cabinet clears pay hike for 1 crore central government employees, pensioners

Cabinet clears pay hike for 1 crore central government employees, pensioners

7th-pay-commission-cg-employees-finance-minister

Twitter : Arun Jaitley ✔ @arunjaitley Congratulations to central government officers, employees & pensioners on a historic rise in their salary & allowances through the 7th CPC. 

 New Delhi: In a bonanza for over 1 crore government employees and pensioners, the Cabinet today approved implementation of the 7th Pay Commission, which had recommended an overall hike of 23.5 per cent.

“Congratulations to central government officers, employees & pensioners on a historic rise in their salary & allowances through the 7th CPC (Central Pay Commission),” Finance Minister Arun Jaitley tweeted shortly after the meeting of the Cabinet headed by Prime Minister Narendra Modi.

It wasn’t however know immediately if the Cabinet had bettered the hike recommended in salary and allowances of nearly 50 lakh government employees and 58 lakh pensioners.

An official said the Cabinet has approved implementation of the recommendations from January 1, 2016.
The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.

After considering the increase proposed in allowances, the hike in remunerations comes to 23.55 per cent.
The 23.55 per cent overall hike in salaries, allowances and pension would entail an additional burden of Rs 1.02 lakh crore or nearly 0.7 per cent of the GDP, to the exchequer.

The entry level pay has been recommended to be raised to Rs 18,000 per month from current Rs 7,000 while the maximum pay, drawn by the Cabinet Secretary, has been fixed at Rs 2.5 lakh per month from current Rs 90,000.

The secretaries’ panel may have recommended raising minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 3.25 lakh.

While the Budget for 2016-17 fiscal did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.

Around Rs 70,000 crore has been provisioned for it, the official said.

PTI

PRASAR BHARATI : Union Cabinet approves recommendations of 7th Pay Commission

PRASAR BHARATI : Union Cabinet approves recommendations of 7th Pay Commission

Union Cabinet today approved the recommendations of the 7th Pay Commission.

AIR correspondent quoting sources reports it will be implemented from 1st January this year.

Detail of the pay commission will be announced later in a press conference.

The 7th Pay Commission was set up in February last year to revise remuneration of over one crore central government employees and pensioners.


HIGHLIGHTS OF 7TH PAY COMMISSION RECOMMENDATIONS CLEARED BY GOVERNMENT

HIGHLIGHTS OF 7TH PAY COMMISSION RECOMMENDATIONS CLEARED BY GOVERNMENT


The Centre is likely to approve higher increase in basic pay than the nearly 15 per cent recommended by the panel for over one crore central government employees and pensioners.
The recommendations of the Seventh Pay Commission got the Cabinet nod today, which will benefit over one crore government employees and pensioners.

The pay panel had recommended a 14.27 per cent hike in basic pay — the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.

HIGHLIGHTS

1. The recommendations will result in a hike in salaries of nearly 50 lakh central government employees and payouts of 58 lakh pensioners.
2. The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years.
3. The commission has recommended a minimum pay of Rs 18,000 per month, fixed an upper ceiling at Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others at present at the same pay level.
4. The date of implementation for the recommendations is January 1, 2016.
5. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.
6. After considering the increase proposed in allowances, the hike in remunerations comes to nearly 24 per cent.
7. While the Budget for 2016-17 did not provide an explicit provision for implementation of the 7th Pay Commission, the government had said the once-in-a-decade pay hike for government employees has been built in as interim allocation for different ministries.
8. A secretaries’ panel, headed Cabinet Secretary P K Sinha, has already vetted the 7th Pay Commission recommendation.
9. The total financial impact of implementing the pay commission recommendations in the 2016-17 fiscal is likely to be Rs 1,02,100 crore, as per government estimates.
10. The pay panel also recommended 'one rank one pension' kind of set-up for the central government's all civil employees, Central Armed Police Forces as well as defence personnel to bring "parity between past pensioners and current retirees with the same length of service" who retired before January 1, 2016.

Exclusive: Union Cabinet granted Seventh Pay commission recommendations

Exclusive: Union Cabinet granted Seventh Pay commission recommendations

modi-jaitley-7th-CPC

The Cabinet has cleared all recommendations made by the Seventh Pay Commission report that will result in about 23.55 percent overall increase in salaries, allowances and pension for more than 1 crore government staff and pensioners. The move is expected to give a big boost to the economy as consumption demand in urban areas is likely rise owing to the rising income levels.

In January, the government had set up a high-powered panel headed by Cabinet Secretary PK Sinha to process the recommendations of the 7th Pay Commission which will have a bearing on the remuneration of nearly 50 lakh central government

The Sinha committee has submitted its report on the recommendations, a PTI report said.

Here's a quick look at the recommendations and the likely implications for the economy:

The recommendations

The Pay Commission recommended 23.55 percent overall increase in salaries, allowances and pension. This is estimated to put an additional burden of Rs 1.02 lakh crore, or nearly 0.7 percent of the GDP, on the government.

The panel recommended a 14.27 percent increase in basic pay, the lowest in 70 years. (The 6th Pay Commission recommended 20 percent hike. This was doubled while implementing it in 2008.)

The minimum pay in government is recommended to be set at Rs 18,000 per month. This is more than double the present Rs 7,000.

The maximum pay is set at Rs 2,25,000 per month for apex scale and Rs 2,50,000 per month for cabinet secretary and others at the same pay level (as against the current Rs 90,000 per month).

In order to bring in greater transparency, the report has recommended replacing the present system of pay bands and grade pay with a new pay matrix.

Of the total financial impact of Rs 1,02,100 crore, the increase in pay would be Rs 39,100 crore, increase in allowances Rs 29,300 crore and increase in pension Rs 33,700 crore.

Also, Rs 73,650 crore of the outgo will be borne by the general budget and Rs 28,450 crore by the Railway Budget.

Implications for economy

The Pay Commission recommendations, once implemented, are expected to boost the consumption demand, and in turn growth.

As R Jagannathan argued in this article, the recommendations could turn out to be an opportunity for prime minister Narendra Modi as the "dash of additional expenditure may be just the prod required for restarting the virtuous cycle of consumption, investment, growth, profits and all the related paraphernalia".

However, there are other issues. It is going to increase the general expenditure of the government. When these recommendations were made, inflation was moderate. But the actual implementation of these recommendations is coming at a time when inflation is rearing its head again. So, there are chances that a spike in demand supported by higher pay to the government staff may just push the inflation further up.

It also has to be remembered that crude oil prices that were benign a while back are not so now. The prices for crude are seen around $50 dollar a barrel now and a further increase cannot be ruled out. However, the only thing that may come to the rescue is a Brexit-induced global demand slowdown that will keep the commodity prices, including that of crude, under check.

The Reserve Bank of India, in its last policy statement, had raised these concerns while saying the surprise rise in April inflation has rendered uncertainty its future trajectory.

"...There are upside risks – firming international commodity prices, particularly of crude oil; the implementation of the 7th Central Pay Commission awards which will have to be factored into projections as soon as clarity on implementation emerges; the upturn in inflation expectations of households and of corporates; and the stickiness in inflation excluding food and fuel," it said.

Above all, a PTI report said citing sources that the secretaries’ panel may have recommended higher pay increase, with minimum entry level pay at Rs 23,500 a month and maximum salary of Rs 3.25 lakh.

If the government approves this, the outgo will increase further and so will the burden on government expenditure. It will also have serious repercussions on fiscal deficit of the government which has been set at 3.5 percent of GDP.

Past experience


However, Richa Gupta, senior economist, Deloitte India, thinks the net impact of the implementation of the recommendation is going to be positive on the economy.

"Overall, there are three aspects: once implemented the recommendations will result in an increase in urban demand; this may in turn lead to higher inflation and put a burden on the government spending. But past experiences tell us that the net impact of pay commission implementation has always been positive," she said.

Also, it is to be noted that the global economy may continue in a rough patch due to Brexit. In such a scenario, the only factor that could help India is the domestic demand and a 23.55 percent compensation hike for government staff will only help, Gupta added.

Source: firstpost.com

Cabinet approves 7th Pay Commission recommendations

LIVE Update : Cabinet approves 7th Pay Commission recommendations:



The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years.

The Union Cabinet on Wednesday approved the recommendations made by the 7th pay commission, news agency ANI reported.

The details of the approval, which will be made public soon, is likely to see a higher increase in the basic pay than the nearly 15 per cent recommended by the 7th Pay Commission for over 1 crore government employees and pensioners.

The pay panel had in November last year recommended 14.27 per cent hike in basic pay at junior levels, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike which the government doubled while implementing it in 2008.

After considering the increase proposed in allowances, the hike in remunerations comes to 23.55 per cent.

The 7th Pay Commission report will be effective from January 1, he said, adding that the Cabinet will decide if the arrears for the six months have to be paid in one go or in installments.

7th Pay Commission: Government May Clear Big Pay Hikes Today

7th Pay Commission: Government May Clear Big Pay Hikes Today

cabinet-ministers_7thCPC
The Union Cabinet is likely to take up today Seventh Pay Commission recommendations (File photo)

Highlights

  •     Pay Commission recommended 23.55% hike in salaries, allowances, pensions
  •     This will put added burden of Rs. 1.02 lakh crore on exchequer annually
  •     Sources say the Finance Minister has made provisions for the payout

New Delhi:  The Union Cabinet may clear the Seventh Pay Commission today that would hike the salaries and allowances for over one crore central government employees and pensioners by at least 23.5 per cent.

Implementation of new pay scales recommended by the 7th Pay Commission is estimated to put an additional burden of Rs. 1.02 lakh crore on the exchequer annually or nearly 0.7 per cent of GDP. The hike, however is the lowest in last seven decades.

The government however is eyeing the economic push the move will provide to the sluggish demand scenario in the economy.

The panel headed by Cabinet Secretary PK Sinha was set up to study the recommendations of the pay commission headed by Justice AK Mathur.  The committee has submitted its report to the Finance Ministry.

The move will impact the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners. The changes are likely to be implemented from January 1, 2016.

The key recommendation of the 7th Pay Commission is a 23.55 per cent increase in salaries, allowances and pension of central government employees and pensioners. This is built around the recommendation for a 14.27 per cent hike in basic pay.

Of the total cost of Rs. 1,02,100 crore, pay increase would cost Rs. 39,100 crore, increase in allowances Rs. 29,300 crore and increase in pension Rs. 33,700 crore.

Based on the proposed rate of hike, Rs. 73,650 crore of the total payout will come from the general budget, while Rs. 28,450 crore will come from the Railways.

One of the key changes suggested by the pay commission has been the 'New Pay Structure', under which the existing system of pay bands and grade pay will be ejected and a new pay matrix will be brought in to bring about more transparency.

The 6th Pay Commission had recommended a 20 percent hike which was eventually doubled when it was implemented in 2008.

The highest pay is pegged at Rs. 2,25,000 per month for apex scale and Rs. 2,50,000 per month for cabinet secretary and others at the same pay level.

The rise will be more than double as the current pay in this scale is Rs. 90,000 per month. With this hike several senior government posts will get a salary higher than lawmakers in Parliament.

The move has led to the discontent among the lawmakers who allege disparity. However, the government is also considering a hike in salaries and allowances of lawmakers.

The minimum pay recommendation is Rs. 18,000 per month. This too is more than double of the present Rs. 7,000.

The commission has also recommended a hike in the annual increment rate to 3 per cent from the existing 2.5 per cent, increased HRA and enhanced gratuity.

Sources say Finance Minister Arun Jaitley has made provisions for the payout. Though the government is making an effort to increase revenue by bringing more under the tax net, the payout will reduce the government's kitty. Especially, because the Centre also needs about Rs. 70,000 crore to meet the One Rank One Pension (OROP) commitment.

But the government is not complaining. The huge payout, once implemented, will boost the consumption demand at a time when the economy is moving sluggishly due to poor demand.

A finance ministry source said, "Government employees are traditionally known to invest pay commission benefits into few specific sectors like real estate. If they follow the tradition, the real estate sector hit by poor demand may turn out to be the biggest beneficiary."

While some experts believe that the additional cash in the market may fuel an inflationary trend, experts say that the impact of the pay commission may become a turning point for the Prime Minister Narendra Modi's government to trigger demand that drives growth investment and profits.

Via: NDTV

7th Pay Commission report: Government set to accept all recommendations; deny retro effect

7th Pay Commission report: Govt set to accept all recommendations; deny retro effect

pay-commission-award-7th-CPC

The Cabinet is likely to approve the 7th Pay Commission award in its entirety soon. Although the pay increases recommended by the commission will take effect from January 1, 2016, the Centre may choose to disburse the increased allowances only prospectively, official sources said.

If the revised allowances take effect only from, say, September this year, the savings to the exchequer would be to the tune of Rs 11,000 crore. Additionally, if the railway ministry decided to toe the Centre’s line, the national transporter will save around Rs 3,800 crore.

The salary revision, which will benefit about 50 lakh government employees and 58 lakh pensioners, is expected to boost consumption demand and help achieve higher economic growth in FY17.

Allowances are currently roughly half of the Centre’s salary bill; as per the pay panel’s award, the steepest increase — 63% — was in allowances, while the overall rise in pay, allowances and pensions recommended was 23.55%.

The Budget in February had provided `53,500 crore towards the pay panel-induced overall rise in pay, allowances and pension (PAP) and also to finance the one-rank-one-pension scheme for the armed forces. The commission, in its November 2015 report, had estimated the additional outgo in FY17 due to its award at `73,650 crore.

“A Committee of Secretaries (headed by the Cabinet secretary PK Sinha), has finalised its report on Pay Commission recommendations… We will soon make a draft Cabinet note based on the report,” finance secretary Ashok Lavasa said. Sources said the report will be considered by the Cabinet as early as Wednesday. The committee was set up in January.

While there is no official word on the exact provision made in budget for higher pay, Lavasa in a recent interview to FE said that its premature to say whether the provisions made in the budget are adequate or not to meet the pay panel requirements.



7th Pay Commission windfall headed towards car, bike-makers

7th Pay Commission windfall headed towards car, bike-makers

Sales of two-wheelers and passenger cars could see a spurt once salaries of government employees are hiked following the seventh pay commission's recommendations

The panel's suggestions are set to be adopted by the union cabinet on Wednesday and should boost the fortunes of manufacturers at a time when demand, in the rural markets, is yet to revive.

“With the states and PSUs also set to effect similar hikes, we see a permanent fiscal stimulus of $50 billion over the next two years, with significant multiplier effect on GDP. This should boost consumption, reduce slackness in the economy and step up investment demand. Large consumer discretionary names are likely to be the top gainers in this scenario,” said Religare Capital Markets in a flash report.

Volumes of motorcycles and small cars have remained subdued over the past one year and should see a pick up, say analysts, once disposable incomes of government employees go up.

“Almost 89% of the central government employees are in lowest rung Group C. Further, 53% of the central government employees reside in rural markets and 44% of them are under 40 years of age. While 7th CPC might not be as beneficial due to the absence of arrears, we believe it would still boost demand for two-wheelers especially in rural markets,” said Jinesh Gandhi and Aditya Arora of Motilal Oswal in a note on the sector.

According to report prepared by Credit Suisse, the 6th Pay Commission which was implemented in Aug 2008 resulted in almost a 10-fold increase in Maruti's sales to government employees between FY08 and FY12. The share of sales to government employees rose in this period from 2% to 15% of total sales.
The seventh pay commission (CPC) has recommended a hike of 25% across categories and would influence over 17.5 million public sector employees including state government, central and state public sector units (PSUs) in the coming few years.

The last pay commission came with arrears of almost two years which also boosted consumption. This time the arrears will be given for eight months and to recover the lost volumes companies may have to wait for a couple of quarters.

In FY 16 Maruti Suzuki’s largest selling car Alto saw its volumes decline by 0.40% to 2,63,422 units when compared to 2,64,492 units in FY 15 as consequence of lack of demand in the rural areas. The entire small car segment of Maruti which still constitutes 22%- 25% of the total volumes - saw a small increase of 1.7% in the last fiscal year. The Gurgaon based company still gets 35% of its volumes from the rural market.

Motorcycle volumes also declined by 0.23% to 1,07,00,466 units during the last fiscal year. Hero Motor Corp – India’s biggest two wheeler manufacturer- was adversely impacted as 50% - 55% of the total volumes came from the rural markets.

“The seventh pay commission will help the make A and B segment cars recover the volumes as 50% of the government employees stay in the rural corners. Also companies like Hero, TVS and Bajaj are also set to benefit from the increased income of government employees,” said as automotive analyst with an institutional brokerage firm.

Since the recommendations are set to be implemented from August, the automobile industry is gearing up for a healthy festival period. Companies like Tata Motors have already launched schemes for government employees.

According to experts, the pay hike of government employees will provide an opportunity for companies like Tata Motors, General Motors, Honda, Ford and others to gain volumes as well apart from the top three car makers.

Source: FE

Cabinet to consider 7th pay Commission today

Cabinet to consider 7th pay Commission today

New Delhi: The union cabinet is likely to consider the 7th Pay Commission recommendations today, government sources said.

The recommendations will result in a hike in salaries of nearly 48 lakh central government employees and payouts of 52 lakh pensioners.

The Centre had earlier in January set up a 13-member Empowered Committee of Secretaries headed by Cabinet Secretary P K Sinha to process the recommendations of the 7th Pay Commission.

The Empowered Committee has submitted its report to the Finance Ministry, Finance Secretary Ashok Lavasa said on Monday, adding its report is being translated into a note for Cabinet.
“It in most likelihood will come up before the Cabinet on Wednesday,” A Finance Ministry official said.

The 7th Pay Commission has recommended a minimum pay of Rs 18,000 per month, fixed an upper ceiling at Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others at present at the same pay level.

The 7th Pay Commission report was submitted to Finance Minister Arun Jaitley on November 19. The total financial impact of implementing its in the 2016-17 fiscal is likely to be Rs 1,02,100 crore, as per government estimates.

The 7h Pay Commission was set up by the UPA government in February 2014, The Commission headed by Justice A K Mathur submitted its 900-page final report, recommending 23.55 per cent hike in salaries, allowances and pensions of Central government employees and pensioners.

The 7th Pay panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The previous Sixth Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.

Sources said that the government will not double it this time. The average increase in basic pay for all government employees will be in the region of 18-20%.

“Considering the tight fiscal position this year, the government may improve upon the Pay Commission recommendation for basic pay to 18% or at best 20%,” a senior official said.

The 7th Pay Commission report will be effective from January 1, he said, adding that the Cabinet will decide if the arrears for the six months have to be paid in one installment.

7th Pay Commission recommendations, 7th Pay Commission News, 7th Pay Commission Demands,7th Pay Commission Implementation, 7th CPC News, 7CPC

7th Pay Commission to get Cabinet nod soon, here’s why you will get 10 per cent less arrears in hand

7th Pay Commission to get Cabinet nod soon, here’s why you will get 10 per cent less arrears in hand

The 7th Central Pay Commission recommendations are likely to be cleared by the Union Cabinet on Wednesday, leading to a much-awaited bonanza for 47 lakh central government employees and 53 lakh pensioners in the form of higher salaries and arrears from January 1, 2016, the date from which the recommendations will be made applicable.

However, if you are one of the working central government employees your arrears would come with a 10 per cent applicable deduction, that would be passed on to the National Pension System (NPS). Similar deductions are applicable to the increased salary component.

The 10 percent deduction from arrears and salary will come with a matching contribution from the government into the NPS for managing for creating a pension corpus at the time of retirement.
“The arrears that Central government employees will get with effect from January 2016 will come with 10 per cent deduction which will flow into their individual accounts under the NPS. There will be a matching contribution from the government,” Chairman, Pension Fund Regulatory and Development Authority (PFRDA), Hemant Contractor, told FeMoney.

It is expected that the increased salary and arrears would take effect from August 1, 2016.
Contractor said that the total amount that would flow into the NPS kitty from the 7th Pay Commission would be substantial. “We are expecting the money arising out of 7th Central Pay Commission recommendations will be released soon. The increased flow would be substantial. However, we have not been able to make an exact calcuation on the amount since we do not know the payment schedule. The amount would depend on the time and amount of arreards released in each tranche if it is released in parts,” the PFRDA Chairman said.

NPS is applicable to all employees joining services of Central Government, including Central Autonomous Bodies (except Armed Forces) on or after January 1, 2004. Many State Governments have adopted NPS architecture and implemented NPS mandatorily for their employees joining on or after a cut-off date.

A subscriber contributes 10 per cent of his salary plus DA into his Tier-I (pension) account on a mandatory basis every month which is invested along with the matching contribution from the employer.

The accumlation is managed by select pension fund managers (PFMs) as per guidelines laid down by PFRDA and is used for old age income benefit of subscribers. The pension regulator administer the National Pension System.

The 7th Pay 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 impact the 7th Pay Commission recommendations on the government coffers will be to the tune of Rs 1.02 lakh crore, with Rs 73,650 crore impactg on the Union Budget and Rs 28,450 crore on the Railway Budget.

7th Pay Commission Allowance to Pension here’s everything you need to know

7th Pay Commission  Allowance to Pension here’s everything you need to know
The Union Cabinet is expected to take up on Wednesday the Empowered Committee of Secretaries’s report on the 7th Pay Commission.
The Empowered Committee of Secretaries, which was formed to look into recommendations of the Seventh Pay Commission, has finalised its report, Finance Secretary Ashok Lavasa said.
Here is everything you need to know about the proposed recommendations in the 7th Pay Commission. Read more to find out what the Pay Commission changes are, if accepted by the Cabinet.
Date of implementation
The recommended date of implementation is January 1, 2016. So, government employees will get arrears from January this year.

Minimum Pay
Based on the Aykroyd formula, the minimum pay in government is recommended to be set at Rs 18,000 per month.

Maximum Pay
Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

What are the financial implications?
The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the Business As Usual scenario. Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs 29,300 crore and increase in pension would be Rs 33,700 crore.
Out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and Rs 28,450 crore by the Railway Budget.
In percentage terms the overall increase in pay & allowances and pensions over the Business As Usual scenario will be 23.55 per cent. Within this, the increase in pay will be 16 per cent, increase in allowances will be 63 per cent, and increase in pension would be 24 per cent.
The total impact of the Commission’s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+Pension) to GDP compared to 0.77 per cent in case of 6th Central Pay Commission.
What is the New Pay Structure?
The present system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed. Grade Pay has been subsumed in the pay matrix. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix.
Fitment
A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.
Annual Increment
The rate of annual increment is being retained at 3 per cent.
Modified Assured Career Progression (MACP)
* Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”.
* The Commission has also proposed that annual increments not be granted in the case of those employees who are not able to meet the benchmark either for MACP or for a regular promotion in the first 20 years of their service.
* No other changes in MACP recommended.
Military Service Pay (MSP)
The Military Service Pay, which is a compensation for the various aspects of military service, will be admissible to the Defence forces personnel only. As before, Military Service Pay will be payable to all ranks up to and inclusive of Brigadiers and their equivalents. The current MSP per month and the revised rates recommended are as follows:

Present Proposed
1. Service Officers ?6,000 ?15,500
2. Nursing Officers ?4,200 ?10,800
3. JCO/ORs ?2,000 ?5,200
4. Non Combatants (Enrolled) in the Air Force ?1,000 ?3,600

Short Service Commissioned Officers
Short Service Commissioned Officers will be allowed to exit the Armed Forces at any point in time between 7 and 10 years of service, with a terminal gratuity equivalent of 10.5 months of reckonable emoluments. They will further be entitled to a fully funded one year Executive Programme or a M.Tech. programme at a premier Institute.
Lateral Entry/Settlement
The Commission is recommending a revised formulation for lateral entry/resettlement of defence forces personnel which keeps in view the specific requirements of organization to which such personnel will be absorbed. For lateral entry into CAPFs an attractive severance package has been recommended.
Headquarters/Field Parity
Parity between field and headquarters staff recommended for similar functionaries e.g Assistants and Stenos.

Cadre Review
A systemic change in the process of Cadre Review for Group A officers recommended.
Allowances
The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.
Risk and Hardship Allowance: Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance.
The current Siachen Allowance per month and the revised rates recommended are as follows:


Present Proposed
i. Service Officers ?21,000 ?31,500
ii. JCO/ORs ?14,000 ?21,000

House Rent Allowance
Since the Basic Pay has been revised upwards, the Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 per cent 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 per cent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 per cent and 10 per cent when DA crosses 100 per cent.
In the case of PBORs of Defence, CAPFs and Indian Coast Guard compensation for housing is presently limited to the authorised married establishment hence many users are being deprived. The HRA coverage has now been expanded to cover all.
Any allowance not mentioned in the report shall cease to exist.
Emphasis has also been placed on simplifying the process of claiming allowances.
Advances: a. All non-interest bearing Advances have been abolished. b. Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to Rs 25 lakh from the present Rs 7.5 lakh.
Central Government Employees Group Insurance Scheme (CGEGIS): The Rates of contribution as also the insurance coverage under the CGEGIS have remained unchanged for long. They have now been enhanced suitably. The following rates of CGEGIS are recommended:

Present Proposed
Level of Employee Monthly Deduction (?) Insurance Amount (?) Monthly Deduction (?) Insurance Amount (?)
10 and above 120 1,20,000 5000 50,00,000
6 to 9 60 60,000 2500 25,00,000
1 to 5 30 30,000 1500 15,00,000

Medical Facilities
Introduction of a Health Insurance Scheme for Central Government employees and pensioners has been recommended.
Meanwhile, for the benefit of pensioners residing outside the CGHS areas, CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis.
All postal pensioners should be covered under CGHS. All postal dispensaries should be merged with CGHS.
Pension
The Commission recommends a revised pension formulation for civil employees including CAPF personnel as well as for Defence personnel, who have retired before 01.01.2016. This formulation will bring about parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.
The past pensioners shall first be fixed in the Pay Matrix being recommended by the Commission on the basis of Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the pay matrix.
This amount shall be raised to arrive at the notional pay of retirees, by adding number of increments he/she had earned in that level while in service at the rate of 3 percent. In the case of defence forces personnel this amount will include Military Service Pay as admissible.
Fifty percent of the total amount so arrived at shall be the new pension. An alternative calculation will be carried out, which will be a multiple of 2.57 times of the current basic pension.
The pensioner will get the higher of the two.
Gratuity
Enhancement in the ceiling of gratuity from the existing Rs 10 lakh to Rs 20 lakh. The ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent. Disability Pension for Armed Forces
The Commission is recommending reverting to a slab based system for disability element, instead of existing percentile based disability pension regime.
Ex-gratia lump sum compensation to next of kin
The Commission is recommending the revision of rates of lump sum compensation for next of kin (NOK) in case of death arising in various circumstances relating to performance of duties, to be applied uniformly for the defence forces personnel and civilians including CAPF personnel.
Martyr Status for CAPF Personnel
The Commission is of the view that in case of death in the line of duty, the force personnel of CAPFs should be accorded martyr status, at par with the defence forces personnel.
New Pension System
The Commission received many grievances relating to NPS. It has recommended a number of steps to improve the functioning of NPS. It has also recommended establishment of a strong grievance redressal mechanism.
Regulatory Bodies
The Commission has recommended a consolidated pay package of Rs 4,50,000 and Rs 4,00,000 per month for Chairpersons and Members respectively of select Regulatory bodies. In case of retired government servants, their pension will not be deducted from their consolidated pay. The consolidated pay package will be raised by 25 percent as and when Dearness Allowance goes up by 50 percent. For Members of the remaining Regulatory bodies normal replacement pay has been recommended.
Performance Related Pay
The Commission has recommended introduction of the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents, reformed Annual Performance Appraisal Reports and some other broad Guidelines. The Commission has also recommended that the PRP should subsume the existing Bonus schemes.

Source:  Indian express

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