OROP for civilians, too; but Pay Panel also suggests abolition of 52 allowances
New Delhi : The Seventh Central Pay Commission (CPC) has recommended 23.55 percent hike in pay and allowances of Union government employees. This will entail a minimum basic pay of Rs. 18,000 for all entry-level employees and a maximum of Rs. 2.5 lakh per month for the top-ranking Central government official. However, the salary of the Cabinet Secretary has been fixed at Rs 2.50 lakh per month. The commission chairman Justice A K Mathur submitted the 900-page report to Union Finance Minister Arun Jaitley on Thursday evening. The recommendations would need the Union Cabinet’s approval for implementation from January 2016. About 48 lakh Central government employees and 54 lakh pensioners will be impacted. As per the recommendation, the salary will go up by 16 percent, allowances by 63 percent and pension by 24 percent. The panel has also suggested increase in military service pay besides a revised pension formula for civil employees, including Central Armed Police Forces (CAPFs) and Defense Personnel retiring before January1, 2016. In a sweeping recommendation, it has suggested abolition of 52 allowances and introduction of a Health Insurance Scheme.
The Finance Minister, who will present the Union Budget after nearly two months in February, said it will cost the public exchequer over Rs. one lakh crore annually. However, he said that implementation of the CPC recommendations will impact fiscal deficit by 0.65 percent of the GDP. The Finance Minister said that a committee, headed by the Expenditure Secretary, will be set up to examine the report and another empowered committee, headed by the Cabinet Secretary, will also evaluate it. Though the exercise normally takes five months, Jaitley said the government would try and complete it as soon as possible. He said the CPC recommendations will also have implications for the autonomous bodies, universities and PSUs as well as State governments which will also have to go in for revision of remuneration for their employees.
Many state governments had voiced their concern over the huge financial burden which the CPC recommendations will have on them and sought linkage of productivity and output with the salary revision. The commission also recommended One Rank One Pension for Central government staffers, paramilitary as well as armed forces personnel. The Pay Commission was set up in February 2014 by the previous UPA government to revise remuneration of Central government employees and pensioners. The last pay commission had recommended an increase of about 35 per cent in the salaries of the Central government employees. The pay panel is set up every 10 years for revising the pay structure of the Central government staff and pensioners. Former Union Cabinet Secre-tary B K Chaturvedi said the recommendations of the Seventh CPC were “balanced” and it would not lead to a spurt in the fiscal deficit and rather keep it in check.
Agencies ADD: In the case of house rent allowance, the panel said since the basic pay was proposed at a much higher rate, such an emolument should be paid at the rate of 24 percent, 16 percent and 8 percent of the new basic pay for classes X, Y and Z cities, respectively. The commission has further recommended that the rate of house rent allowance be revised to 27 percent, 18 percent and 9 percent when the dearness allowance crosses 50 percent, and to 30 percent, 20 percent and 10 percent when it crosses 100 percent. The ceiling of gratuity is also recommended at a higher rate of Rs.20 lakh, as against Rs.10 lakh. “The ceiling on gratuity may be raised by 25 percent, whenever dearness allowance rises by 50 percent,” the commission has said.
