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Take A Look and Understand What Upcoming CPC May Bring for You
As month of April is nearing, so is approaching the implementation of 7th CPC. Almost every employee of central government is eagerly waiting for the bag of goodies that Finance Minister Arun Jaitely will present in this year’s budget. And while everyone is happy because these recommendations will give a boost to the economy by giving more disposable income in the hands of 47 lakh government employees and 52 lakh pensioners, many experts are still in doubt that they may trigger inflation, thanks to the annual burden of Rs. 1.02 lakh crore that they’ll put on the shoulders of exchequer. We’re trying to present the full picture here in 26 points:
- Effective from: January 1, 2006
- Minimum pay: The CPC report has set it at Rs. 18,000, which is 2.57 times more than current minimum pay.
- Maximum pay: This thing, which is enjoyed by Cabinet Secretary and some of his equivalents, has been hiked from Rs. 90,000 per month to Rs. 250,000 per month.
- Financial impact: The total burden of these recommendations during FY 2016 – 2017 is expected to be around Rs. 102,100 crore, 72% of which will be the part of general budget. From this overall requirement Rs. 39,100 crore will be required for the basic pay hike, Rs. 29,300 crore for allowances and Rs. 33,700 crore for increase in pension.
- New Pay Structure: The commission has suggested to subsume the current Grade Pay system into its new system called “Pay Matrix” for bringing more transparency and fixing the issues associated with Grade Pay.
- Increment: The annual increment rate has been set at 3%.
- Fitment Factor: 7th CPC recommends a uniform fitment factor of 2.57 for all employees.
- Modified Assured Career Progression (MACP): With a hike in pay come government’s expectations of high performance – The performance requirements for MACP have been upgraded from “good” to “very good.” It has also been suggested that those who don’t meet both MACP requirements and requirements for a promotion within first 20 years of their services should not be provided any type of increment.
- Military Service Pay (MSP): Given below is the revised pay structure of MSP suggested by the commission:
|Category of personnel||Present MSP||Recommended MSP|
|Service officers||Rs. 6,000||Rs. 15,500|
|Nursing officers||Rs. 4,200||Rs. 10,800|
|JCOs/Ors||Rs. 2,000||Rs. 5,200|
|Non combatants enrolled in Air Force||Rs. 1,000||Rs. 3,600|
- Benefits for Short Service Commissioned Officers (SSCOs): A recommendation in CPC report suggests that officers belonging to this category should be allowed to exit Armed Forces anytime between 7-10 years of their service, and upon exit they should be eligible for following benefits:
- A terminal gratuity equivalent to 10.5 months of reasonable salary, and;
- An Executive Program or M.Tech program at any Premier Institute(s) of the country.
- Parity Between Similar Functionaries of Field and Headquarters: The report also suggests to fill the void between servants who do similar jobs but still suffer from the woes of different compensation due to being part of different staff units (i.e. Stenos of Field Staff vs. Assistants of Headquarter staff).
- Lateral Entry/Settlements:
- 7th CPC has recommended to revise the formula of lateral entry/settlement for personnel of defense forces. New formula has been designed to facilitate the requirements of organizations that’ll absorb such personnel.
- The report has also suggested to reward the lateral entries into CAPFs with some handsome severance packages.
- One of the first things that comes to mind about allowances after reading the report is their decreased count. The number of allowances has been reduced either by abolishing them or by subsuming them into other allowances. 52 of them have been recommended for complete abolition, while another 36 have been subsumed into some other allowances.
- For Risk and Hardship Allowances (RHAs) commission has suggested a new calculation system called Risk and Hardship Matrix.
- Since basic pay has been hiked, pay commission has recommended paying House Rent Allowance (HRA) at following rates:
|City Class||Allowance to be paid|
|Class X cities||24%|
|Class Y cities||16%|
|Class Z cities||8%|
Aside from this, commission has also suggested revising the HRA in following manner:
|Increase in DA||City Class||Revised Rate of Allowance|
|Over 50%||Class X||27%|
|Over 100%||Class X||30%|
The commission has also recommended extending HRA coverage to bachelor PBORs of Defense, bachelor CAPF personnel and bachelor Indian Coast Guards. Currently this coverage is available to married personnel only.
- Specific attention has also been paid to simplify the process of claiming an allowance.
- Advances: The report has recommended to reduce these facilities. Each and every non-interest bearing advance has been recommended for abolition, and even among interest bearing advances only two have been retained: House Building Advance (HBA) and Personal Computer Advance (PCA). Though the ceiling of former has been raised from Rs. 7 lakh to to Rs. 25 lakh.
- Medical Benefits:
- A new Health Insurance Scheme has been recommended for employees and pensioners.
- It has been recommended to merge all postal dispensaries with CGHS and also cover all the post pensioners under CGHS.
- A new pension system has been recommended to fill the gap between retired pensioners (those who retired before 1st of January 2016) and current retirees. It has been suggested in the report of commission that government should first of all find out what was the grade pay and pay band of retired employees at the time of their superannuation. Once those things are clear, those pensioners should be added to corresponding levels of pay band in the new Pay Matrix that has been suggested by the commission. All the increments that a pensioner earned while working in that pay band should also be counted and added at the rate of 3% while determining the new pension. Amount thus received (after adding all increments) should be divided by 2 to achieve its 50%, which would become the first option for pension of a retiree. Then an alternative calculation should also be done to figure out a second option, according to which new pension may be 2.57x of current pension. Whatever amount turns out to be higher among these two options should become the new pension of the retiree.
- One Rank One Pension (OROP) has been recommended for all civil servants.
- The commission also recommended setting up a better and faster grievance redressal mechanism for National Pension System (NPS) after receiving many complaints regarding current NPS.
- The commission has also suggested implementing a re-implement the slab based system for disability pension of defense personnel rather than current percentile based system, a suggestion that has attracted criticism from Defense personnel. The current system was introduced in 6th
- Doubled Gratuity: The report says that gratuity ceiling should be doubled to Rs. 20 lakh, and should also be increased by 25% when DA passes the mark of 50%.
- Lump Sum Compensation to Next of Kin (NOK) for CAPF personnel: 7th CPC suggests that this compensation provided to Next of Kin in case of death while performing the duties should be extended to CAPF personnel too.
- Martyr Status for CAPFs: The commission has suggested that martyr status should be given to CAPF personnel too if they die in line of their duties.
- Deduction-Free Pension for Some Regulatory Bodies: For Chairpersons and Members of certain regulatory bodies commission has recommended a consolidated pay package of Rs. 450,000 and Rs. 400,000 respectively. The pension of members retired from such regulatory bodies shall not be deducted from their consolidated pay package and the package may also be raised by 25% when DA surpasses 50%. Normal replacement pay has been suggested for members of remaining regulatory bodies.
- Performance Related Pay (PRP): To reward the high-performing employees commission has recommended PRP on the basis of annual performance appraisals and some other broad guidelines. Other existing bonus schemes have to be subsumed under PRP.
Points of Conflict
The report of 7th CPC also has some points of conflict. No unanimity has been established until now on these points:
- The Financial Edge: As of now a financial edge is provided to members of IAS and IFS only at 3 promotional stages from Senior Time Scale (STS) to Junior Administrative Grade (JAG). 7th CPC Chairman has recommended to extend the coverage of this edge to IPS and IFoS servants too. However, Mr. Vivek Rae, member of the commission, doesn’t see any requirement of financial edge for members of IPS and IFoS. Another member, Dr. Rathin Roy, wants the edge to be completely abolished.
- Empanelment under Central Staffing Scheme (CSS): Rathin Roy and CPC Chairman are of view that Group A officers of Central Services and All India Service officers who have been working for more than 17 years should be considered eligible for empanelment under CSS. However, Mr. Vivek Rae hasn’t agreed on this point and has recommended the review of CSS guidelines .
- Uniform Age for Superannuation of CAPF personnel: Chairman and Dr. Rathin Roy think that there should be a uniform age of 60 for superannuation of all CAPF personnel, but Mr. Vivek Rae hasn’t supported this view.
- Non Functional Upgradation (NFU) for Group A Services: Chairman feels that NFU enjoyed by officers of all Group A Services should be extended to Indian Coast Guards, CAPF personnel and personnel of various Defense forces too. However, Dr. Rathin Roy and Mr. Vivek Rae have recommended the abolition of NFU at HAG and SAG levels.
So this is the crux of 7th CPC in 26 brief points. However, keep in mind that these’re only recommendations made by the commission – not final regulations set to be implemented. These’re currently being reviewed by a panel of secretaries established by the Finance Ministry, and that panel may alter any of these suggestions before submitting to Finance Ministry for implementation. So don’t be shocked if any of the things mentioned above turn out completely different when CPC is implemented. A notification regarding implementation may be announced in the budget.