Seventh CPC Report -arrives at last !

Hurrah ! The wait is over for all Govt employees . For those who are directly affected as well as those who would reap benefits of the fall out. Whether it’s time for setting up crackers or for waiting till VIIIth Central Pay Commission (CPC)  will be known in coming days.Unlike previous occasions the CPC has ben considerate to the extent of submitting the report on time leaving enough time for Govt to deliberate and accept or reject various recommendations.

The initial signals are that of modest gains except for a few who were persistent about catching up with Indian Administrative Services and creating a level playing field. The Pay Commission has ultimately got convinced to extend the edge enjoyed by IAS in matter of pay fixation at various stages of career to IPS and IFoS.Following are some of the highlights.

The CPC while deciding about pay scales and procedure for fitment has come up with innovative concept of Pay Matrix whereby the lateral spread in the matrix would denote the panorama of job functions and related pay packages . The vertical movement would cover the  pay hikes.The system of Pay Bands and Grade pays introduced by the previous CPC has thus been laid to rest.The  CPC had been confronted with several anomalies by the representationists which prompted the change. Pay matrices have been drawn up for civilians, defence personnel and for military nursing service.

For the Civilian Employees the minimum pay starts from Rs.18000/- (corresponding to existing lowest pay of Rs.7000/-)and with the suggested annual increment rates of 3% the highest salary is pegged to Rs.2.25 Lakhs.A progressive suggestion is for dispensing with the differential pay system between direct recruits and those occupying a post by internal promotion.The strategy for pay fixation has been further simplified with introducing fitment factor of 2.57 which should expectedly take care of pay fixation anomalies which crop up whenever the matter of revision of pay scales comes up.This fitment factor of 2.57 is being proposed to be applied uniformly for all employees.

A similar Pay Matrix for defence personnel starts from Grade Pay of Rs. 2000/- which covers salary of sepoys and equivalents.A somewhat similar system has been conceived for Military Nursing Services.The aspect of performance monitoring and periodic promotions will continue through Modified Assured Career Progression Scheme  as per past intervals of 10/20/30 years with the changed  promotion criteria being benchmarked at” very good”. For military personnel the review is pegged to 8/6/14 years.

All ranks of the Defence forces upto Brigadier and equivalent ranks will continue to be entitled to payment of Military Service Pay (MSP)which is given in recognition of job related challenges and consequential difficulties.MSP would be counted for calculation of DA and Pension but not for House Rent Allowances (HRA) and Annual Increment.For defence personnel the Commission has also recommended rationalisation of compensation to Army Personnel for death or injury under various eventualities.

For  Short Service Commissioned Officers the good news is is that they may be permitted to exit Armed Forces any time between 7 and 10 years of service with a terminal gratuity equivalent of 10.5 months of reckon able emoluments. along with recommendation for a fully funded one year Executive Programme or a M.Tech. programme at a premier Institute.

The Commission has made drastic recommendation in respect of allowances admissible to Employees “with the overall aim of transparency, simplification and nationalization”.The Commission has highlighted the  difficulties related to staff housing and revised the upper limits  for housing loans besides liberalising the process and permitting separate loans to spouses who are in Govt. job. Requisition of private house for Govt. Employees has been recommended wherever the available staff quarters are not sufficient to meet the demand.

The Commission has proposed enhancement in the ceiling of gratuity payable at the time of retirement from the existing ₹10 lakh to ₹20 lakh from 01.01.2016.adding that the ceiling on gratuity may increase by 25 percent whenever DA rises by 50 percent.

Another area covered extensively is that of periodic Cadre Review.The Commission has recommended  that proposals of this nature be examined by Departments initially coopting DoPT and Department of Expenditure under concerned Secretary of the Department.Only after this basic scrutiny the matter can go to Cabinet Secretary in deserving cases.

Most of the allowances that have been retained have  been given a raise that is commensurate with the rise in DA. Allowances that are in the nature of a fixed amount but fully indexed to DA have not been given any raise. Regarding percentage based allowances, it has been stated that since the Basic Pay will rise as a result of the recommendations of the Commission some of the allowances have been proposed to remain untouched.

For House Rent Allowance the Commission has recommended rationalisations to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively. A formula has also been suggested for upward hike in HRA pattern as Cost of living index crosse 50% and 100%.Currently, in the case of those drawing either NPA or MSP or both, the amounts of NPA/MSP are included with the Basic Pay and HRA is being paid as a percentage of the total amount. The Commission has recommended that  HRA should be calculated as a percentage of Basic Pay only and that add-ons like NPA, MSP, etc. should not be included while working out HRA.

Amongst the allowances suggested for abolition are Night Duty allowances and Motor Car /Motor Cycle purchase advances. .

The Pay Commission has made several suggestions for improving  Health Coverage for Employees .These suggestions  include Scheme for Health Insurance,and suggestion for extending list  of hospitals from private sector in those areas where coverage is low.The Rates of contribution for Health Insurance are proposed to be increased upto Rs.1500/2500/5000.The higher rates for contribution would result in insurance covers extending to Rs.15/25/50 Lakhs.

For the Pensioners  the Commission has sought to make complete parity of past pensioners with current retirees.Under the recommendations  the pension of  personnel who retired prior to 01.01.2016 (expected date of implementation of the Seventh CPC recommendations) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he/she had earned in that level while in service, at the rate of three percent. Fifty percent of the total amount so arrived at shall be the revised pension. In the case of the Defence personnel, total amount so arrived at shall be inclusive of MSP.Another  calculation is to be carried by  multiplying the pension fixed under sixth  CPC  by 2.57 to arrive at an alternate value for the revised pension.Pensioners will be given the option of choosing whichever formulation is beneficial for acceptance.

This was what I could grab in the first reading of CPC report.Will be coming up with subject wise write ups in ensuing articles.

Sixth CPC Report:(ii) Benefits for All India Services

Chapter 3.2 of the Report deals with All India Services. The three All India Services namely Indian Administrative Service (IAS) , Indian Police Service (IPS) and Indian Forest Service (IFS) owe their origin to the mandate given to the Parliament under Article 312 of the Constitution. The recruitments for IAS & IPS are made by UPSC based on competitive examinations held annually. The Recruitment for IFS is made through separate All India Examination. The Commission’s report has given due appreciation to the importance of All India Services and observed that innovative measures are necessary for ensuring that these services are able to deliver to the best possible extent.

The Commission has observed that the supremacy of IAS over the other All India Services has to continue as per the trend which started from the times when the First Central Pay Commission submitted it’s report. It has noted that the Fifth CPC had also held the same views in this context. While coming to this conclusion it has taken note of the wide ranging exposure to challenging assignments that the officers of this service experience over their career.

Regarding the competition with private sector salaries the Commission’s observations are that despite the difference in pay package the IAS due to it’s unique status in the scheme of governance continues to draw the best talents. A large number of young men and women who join the service are professionally qualified and have in many cases given up economically rewarding jobs to join IAS because of the challenges and prestige attached to the service. The IAS officers have been given an edge in the pay scales at the entry stage in view of the tough and challenging atmosphere that they have to encounter from the initial stage of service. The edge given by the Fifth CPC in different pay scales had in monetary terms ranged from Rs.650/- to Rs.800/-. In the recommendations for the Sixth CPC the grade pays recommended for IAS have been made slightly higher in comparison to grade pay for other services by Rs.400/- for Senior Time Scale, Rs. 900/- for Junior Administrative Grade and Rs. 700/- for NFSG (Non functional Selection Grade). The benefit would continue throughout their career due to proposed nature of pay scales known as pay bands.

For the Indian Police Service a major recommendation is for up gradation of posts of Director Generals (DGs) in all the five Central Para Military Forces (CPMFs) to revised scale of Rs. 80000/-. The Commission feels that this step would ensure continuity in the Services and create an atmosphere conducive to planning for long term reforms in these forces . For the Indian Forest Service (IFS) up gradation of similar nature has been recommended for the Post of Director of Indira Gandhi National Forest Academy (IGNFA).

The most popular demand raised by the IPS was for removal of the post of DIG which is covered by Super Time Scale of Rs.16400/-.Commission noted that the post of DIG is a functional post in most of the States as well as in CPMFs. In several States the range is headed by DIG. It has recommended that the post be continued. The officers in the Forest Service had made a similar demand for the Post of Conservator of Forests. The demand has been found unacceptable on similar grounds. Commission has also recommended that the relative hierarchical structure recommended by the previous CPC should continue in the IFS.