Highlights:
1. The present system of Pay Bands and
Grade Pay has been dispensed with and a new Pay Matrix as recommended by
the Commission has been approved. The status of the employee, hitherto
determined by grade pay, will now be determined by the level in the Pay
Matrix. Separate Pay Matrices have been drawn up for Civilians, Defence
Personnel
and for Military Nursing Service. The principle and rationale behind these matrices are the same.
2. All existing levels have been
subsumed in the new structure; no new levels have been introduced nor
has any level been dispensed with. Index of Rationalisation has been
approved for arriving at minimum pay in each Level of the Pay Matrix
depending upon the increasing role, responsibility and accountability at
each step in the hierarchy.
3. The minimum pay has been increased from Rs. 7000 to 18000 p.m.
Starting salary of a newly recruited employee at lowest level will now
be Rs. 18000 whereas for a freshly recruited Class I officer, it will be
Rs. 56100. This reflects a compression ratio of 1:3.12 signifying that
pay of a Class I officer on direct recruitment will be three times the
pay of an entrant at lowest level.
4. For the purpose of revision of pay and pension, a fitment factor of 2.57
will be applied across all Levels in the Pay Matrices. After taking
into account the DA at prevailing rate, the salary/pension of all
government employees/pensioners will be raised by at least 14.29 % as on 01.01.2016.
5. Rate of increment has been retained at 3 %.
This will benefit the employees in future on account of higher basic
pay as the annual increments that they earn in future will be 2.57 times
than at present.
6. The Cabinet approved further
improvements in the Defence Pay Matrix by enhancing Index of
Rationalisation for Level 13A (Brigadier) and providing for additional
stages in Level 12A (Lieutenant Colonel), 13 (Colonel) and 13A
(Brigadier) in order to bring parity with Combined Armed Police Forces
(CAPF) counterparts at the maximum of the respective Levels.
7. Some other decisions impacting the employees including Defence & Combined Armed Police Forces (CAPF) personnel include :
· Gratuity ceiling enhanced from Rs. 10 to 20 lakh. The ceiling on gratuity will increase by 25 % whenever DA rises by 50 %.
· A common regime for payment of Ex-gratia lump sum compensation for
civil and defence forces personnel payable to Next of Kin with the
existing rates enhanced from Rs. 10-20 lakh to 25-45 lakh for different
categories.
· Rates of Military Service Pay revised from Rs. 1000, 2000, 4200 &
6000 to 3600, 5200, 10800 & 15500 respectively for various
categories of Defence Forces personnel.
· Terminal gratuity equivalent of 10.5 months of reckonable emoluments
for Short Service Commissioned Officers who will be allowed to exit
Armed Forces any time between 7 and 10 years of service.
· Hospital Leave, Special Disability Leave and Sick Leave subsumed into a
composite new Leave named ‘Work Related Illness and Injury Leave’
(WRIIL). Full pay and allowances will be granted to all employees during
the entire period of hospitalization on account of WRIIL.
8. The Cabinet also approved the
recommendation of the Commission to enhance the ceiling of House
Building Advance from Rs. 7.50 lakh to 25 lakh. In order to ensure that
no hardship is caused to employees, four interest free advances namely
Advances for Medical Treatment, TA on tour/transfer, TA for family of
deceased employees and LTC have been retained. All other interest free
advances have been abolished.
9. The
Cabinet also decided not to accept the steep hike in monthly
contribution towards Central Government Employees Group Insurance Scheme
(CGEGIS) recommended by the Commission. The existing rates of monthly contribution will continue. This will increase the take home salary of employees at lowe
1470.
However, considering the need for social security of employees, the
Cabinet has asked Ministry of Finance to work out a customized group
insurance scheme for Central Government Employees with low premium and
high risk cover.
10. The general recommendations of the
Commission on pension and related benefits have been approved by the
Cabinet. Both the options recommended by the Commission as regards
pension revision have been accepted subject to feasibility of their
implementation. Revision of pension using the second option based on
fitment factor of 2.57 shall be implemented immediately.
A Committee is being constituted to address the implementation issues
anticipated in the first formulation. The first formulation may be made
applicable if its implementation is found feasible after examination by
proposed Committee which is to submit its Report within 4 months.
11. The Commission examined a total of
196 existing Allowances and, by way of rationalization, recommended
abolition of 51 Allowances and subsuming of 37 Allowances. Given the
significant changes in the existing provisions for Allowances which may
have wide ranging implications, the Cabinet decided to constitute a
Committee headed by Finance Secretary for further examination of the
recommendations of 7th CPC on Allow
ances
The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates.
12. The Cabinet also decided to constitute two separate Committees (i) to suggest measures for streamlining the implementation of National Pension System (NPS) and (ii) to look into anomalies likely to arise out of implementation of the Commission’s Report.
13. Apart from the pay, pension and
other recommendations approved by the Cabinet, it was decided that the
concerned Ministries may examine the issues that are administrative in
nature, individual post/ cadre specific and issues in which the
Commission has not been able to arrive at a consensus.
14. As estimated by the 7th CPC, the
additional financial impact on account of implementation of all its
recommendations in 2016-17 will be Rs. 1,02,100 crore. There will be an
additional implication of Rs. 12,133 crore on account of payments of
arrears of pay and pension for two months of 2015-16.