Cabinet
approves modifications in the 7th CPC recommendations
on pay
and pensionary benefits
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, in
June, 2016, the Cabinet had approved implementation of the recommendations with
an additional financial outgo of Rs 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 Rs.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 Rs.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 Rs.
130 crore per annum.
What
the above decision means for pre-2016 retirees?
The exact impact of
above decision can be analysed only after orders are issued. Based on the information shared earlier by
the pension department with JCM leaders and SCOVA members modification made
appears fixing the pay of pre 2016 retirees notionally in revised pay matrix
and then fixing pension at 50% of pay.
If the pension so fixed is more than the pension fixed with fitment
formula of 2.57 then pension will be revised otherwise no change. It is
presumed that option will be given to pensioners. For arriving at pay in revised matrix of 7
CPC for those who retired prior to 1-1-1996 notionally there pay will be fixed
under V CPC scales and VI CPC Pay structure.
Similarly for those who retired prior to 2006 it will be notionally
fixed in VI CPC Pay structure and then in 7 CPC matrix. The pay for this purpose is pay last drawn as
recorded in their PPO. For the
information of readers fixation formula under V CPC, VI CPC and VII CPC rules
is given below:
V
CPC:
1
|
Basic pay as
on 1-1-1996
|
xxx
|
2
|
DA appropriate
to basic pay at 1510 pts
|
Xxx
|
3
|
I IR
|
100
|
4
|
2nd
IR 10% of BP subject to minimum of Rs.100
|
Xxx
|
5
|
40% of BP
|
Xxx
|
6
|
Total
|
xxx
|
Pay
in the revised scales to be fixed at the stage next above the total even if
there is stage equal to the total.
Rates of DA as on 1-1-1996
For
pay range upto Rs.3500pm
|
148%
of pay
|
For
pay range above Rs.35oo and upto 6000 pm
|
111%
of pay subject to a minmum of Rs.5180 pm
|
For
pay range above Rs.6000 pm
|
96%
of pay subject to minimum of Rs.6660 pm
|
VI CPC
1
|
Existing pay
scale
|
x
|
2
|
Applicable pay
band and grade pay
|
a+b
|
3
|
Basic pay as
on 1-1-2006
|
xxx
|
4
|
Pay after
multiplication of BP by a factor 1.86 rounded off to next multiple of 10
|
Xxx
|
5
|
Pay in the pay
band
|
Xxx
|
6
|
Grade Pay
applicable to the post
|
b
|
7
|
Revised basic
pay is pay in the pay band and grade pay.
|
Xxx +b
|
VII CPC
1
|
Existing Pay Band
|
a
|
2
|
Existing Grade
Pay
|
a+b
|
3
|
Basic pay as
on 1-1-2016
|
Xxx+b
|
4
|
Level corresponding to GP
|
C
|
5
|
Pay after multiplication of BP by a fitment factor of 2.57
|
Xxx
|
6
|
Revised Pay in Pay Matrix (either equal to or next higher
Cell
|
Xxx
|
Illustration:
‘X retired on 31-1-1992
and pay was Rs. 2900 in the scale 1640-2900
1. His
notional pay under 5 CPC scale of 6500-10600 is Rs.8900;
2. His
notional pay under 6 CPC (PB2 +GP 4200) is Rs.20760;
3. His
notional pay under 7 CPC (Level 6) is Rs.53600;
4. Pension
fixed on 1-1-2016 with a fitment formula of 2.57 is Rs.25847;
5. Pension
as per cabinet deciscion 50% of notional pay as per 7 cpc is Rs26800.
