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Monday, November 23, 2015


7TH PAY COMMISSION REPORT SUBMITTED TO GOVERNMENT OF INDIA ON 19.11.2015

MOST DISAPPOINTING AND RETROGRADE RECOMMENDATIONS – NO CHANGE IN MACP
                                                                                      
IMPORTANT RECOMMENDATIONS


1.    DATE OF EFFECT – 01.01.2016

2.    MINIMUM PAY – 18000 Based on the Aykroyd formula, the minimum pay in government is recommended to be set at ₹18,000 per month


3.    FITMENT FORMULA – The fixation of revised pay has been greatly simplified in the new pay matrix and will not involve further calculations. The basic pay being drawn by any person on the date of implementation is to be multiplied by a factor of 2.57 and the figure so obtained will Report of the Seventh CPC be matched for the closest figure in the level pertaining to his/her existing grade pay and fixed there.
PAY BAND
GRADE PAY
MULTIBLE FACTOR
I – 5200-20200
1800, 1900, 2000, 2400 &2800
2.57
II – 9300 - 34800
4200, 4600, 4800 & 5400
2.62
III – 15600-39100
5400, 6600 & 7600
2.67

Pay Fixation in the New Pay Structure
5.1.28 The fitment of each employee in the new pay matrix is proposed to be done by multiplying his/her basic pay on the date of implementation by a factor of 2.57. The figure so arrived at is to be located in the new pay matrix, in the level that corresponds to the employee’s grade pay on the date of implementation, except in cases where the Commission has recommended a change in the existing grade pay. If the identical figure is not available in the given level, the next higher figure closest to it would be the new pay of the concerned employee. A couple of examples are detailed below to make the process amply clear

5.1.29 The pay in the new pay matrix is to be fixed in the following manner:
Step 1: Identify Basic Pay (Pay in the pay band plus Grade Pay) drawn by an employee as on the date of implementation. This figure is ‘A’.
Step 2: Multiply ‘A’ with 2.57, round-off to the nearest rupee, and obtain result ‘B’.
Step 3: The figure so arrived at, i.e., ‘B’ or the next higher figure closest to it in the Level assigned to his/her grade pay, will be the new pay in the new pay matrix. In case the value of ‘B’ is less than the starting pay of the Level, then the pay will be equal to the starting pay of that level.
Example I
i. For example an employee is presently drawing Basic Pay of ₹55,040 (Pay in the Pay Band ₹46340 + Grade Pay ₹8700 = ₹55040). After multiplying ₹55,040 with 2.57, a figure of ₹1,41,452.80 is arrived at. This is rounded off to ₹1,41,453.
ii. The level corresponding to GP 8700 is level 13, as may be seen from Table 4, which gives the full correspondence between existing Grade Pay and the new Levels being proposed.
iii. In the column for level 13, the figure closest to ₹1,41,453 is ₹1,41,600.
iv. Hence the pay of employee will be fixed at ₹1,41,600 in level 13 in the new pay matrix tabke
5.1.30 As part of its recommendations if Commission has recommended any upgradation or downgrade in the level of a particular post, the person would be placed in the level corresponding to the newly recommended grade pay.
7TH CPC PAY FIXATION ILLUSTRATION
A.     Select your basic pay as on 01.01.2016 including grade pay -  It is your basic pay

B.      Identify your grade pay and pay band to select the Pay Matrix Table No: 5 to identify your level according to your Grade pay

C.      Multiply your basic pay  as given below:
PAY BAND
GRADE PAY
MULTIBLE FACTOR
I – 5200-20200
1800, 1900, 2000, 2400 &2800
2.57
II – 9300 - 34800
4200, 4600, 4800 & 5400
2.62
III – 15600-39100
5400, 6600 & 7600
2.67
D.     Multiply your basic pay [Pay + Grade pay] as on 01,01,2016 with the above factor according to your Grade pay and  round-off to the nearest rupee, and obtain result = X

E.      The figure so arrived at, i.e., ‘X’ or the next higher figure closest to it in the Level assigned to your grade pay, will be the new pay in the new pay matrix. In case the value of ‘X’ is less than the starting pay of the Level, then the pay will be equal to the starting pay of that level.

F.       The above arrived figure is your Rationalized entry pay i.e. your new basic pay as on 01.01.2016. In the above formula, your existing DA 119 is automatically merged with the multiply factor.
G.     This is the first pay commission avoiding disparity in the pay fixation in arriving arrears and all the officials from new recruits to retiring person will get the benefit equally as per the above multiple factor according your Grade pay.
ILLUSTRATION:
PAY BAND
GRADE PAY
BASIC PAY AS ON 01.01.2016
TOTAL PAY AS ON 01.01.2016
MULTIBLE FACTOR
NEW BASIC PAY AS ON 01.01.2016
ROUNDED NEW BASIC PAY   AS ON 01.01.2016

I
1800
7500
9300


2.57
23901
24200
1900
8500
10400
26728
26800
2000
9500
11500
29555
30200
2400
11000
13400
34438
35300
2800
13000
15800
40606
41600

II
4200
15000
19200

2.62
50304
50500
4600
18000
22600
59212
60400
4800
21000
25800
67596
68000
5400
24000
29400
77028
77900
Note: The basic pay mentioned above as on 01.01.2016 is only example for the illustration. You replace it with your basic pay as on 01.01.2016 and calculate your pay. It is simple mechanism.

4.    FIXATION ON PROMOTION – NO CHANGE – ONLY ONE INCREMENT IN THE OLD SCALE
A.     For those who have been promoted from the previous level, the fixation of pay in the new level will depend on the pay they were already drawing in the previous level, after grant of  3% increment, the official pay will be fixed to the next level.
  1. When the employee receives a promotion or a non-functional financial upgrade, he/she progresses one level ahead on the horizontal range – Para 5.1.23.  [As per this para, if any officials will get LSG/HSG promotion  after getting MACP, the officials will get fixation benefit to the next stage as mentioned in Matrix table.]

5.    ANNUAL INCREMENT – 3% NO CHANGE
a. Suppose, Ms. ABC, who, after having been fixed in the Pay Matrix, is drawing a Basic Pay of ₹32,300 in Level 4. When she gets an annual increment on 1st of July, she will just move one stage down in the same Level. Hence, after increment, her pay will be ₹33,300. [Even though 3% increment is only for calculation, but the official will be placed one stage own in the same level.

b. WITH HOLDING OF ANNUAL INCREMENT - The Commission is therefore proposing withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service

6.    MODIFIED ASSURED CAREER PROGRESSION – NO CHANGE 
a. The inherent issues in the existing pay structure owing to which there was widespread resentment have been set right by way of rationalisation of pay levels, abolition of pay band and grade pay Report of the Seventh CPC and introduction of a matrix based open pay structure. Hence, there is no justification for increasing the frequency of MACP
b. No change in  10, 20, 30 years - Performance benchmarks for MACP have been made more stringent from “Good” to “Very Good”. The Commission has also proposed that annual increments not be granted in the case of those employees who are not able to meet the benchmark either for MACP or for a regular promotion in the first 20 years of their service. No other changes in MACP recommended.

7.    PAY BAND, GRADE PAY SYSTEM ABOLISHED - Considering the issues raised regarding the Grade Pay structure and with a view to bring in greater transparency, the present system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed. Grade Pay has been subsumed in the pay matrix. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix.
8.    MAXIMUM PAY INCREASE – 14.29% - This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on account of DA neutralisation, assuming that the
rate of Dearness Allowance would be 125 percent at the time of implementation [01.01.2016] of the new pay. Accordingly, the actual raise/fitment being recommended is 14.29 percent
Comments: [ Actually our basic pay + Grade pay = 100% DA as on 01.07.2015-119% and as on 01.01.2016 presumed as 125%. As such, at present we are getting 225% [100 + 125} i.e.2.25 , where as our fitment formula recommended as 2.57. The difference of 2.57-2.25 = 0.32 % is the only real increase of our existing pay.]

9.   ALLOWANCES – NO IMPROVEMENT
Commission recommended abolition of 52 existing allowances such as Assisting Cashier Allowance, Cash Handling Allowance, Treasury Allowance, Handicapped Allowance, Risk Allowance, Savings Bank Allowance, Special compensatory (Hill Area) Allowance, Cycle Allowance, Family Planning Allowance etc. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.

10.          HRA REDUCED TO 26%, 16% AND 8% FOR X, Y AND Z CITIES - Since the Basic Pay has been revised upwards, the Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 percent of the new Basic Pay for Class X, Y and Z cities respectively. The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent
11.          Advances: All non-interest bearing Advances have been abolished - Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to 25 lakhs from the present 7.5 lakhs

12.          DA FORMULA – NO CHANGE FOR FUTURE INDEX - Commission recommends continuance of the
existing formula and methodology for calculating the Dearness Allowance
13.          Central Government Employees Group Insurance Scheme (CGEGIS): The Rates of contribution as also the insurance coverage under the CGEGIS have remained unchanged for long. They have now been enhanced suitably. The following rates of CGEGIS are recommended:
Present
Proposed
Level of Employee
Monthly Deduction
 (₹)
Insurance Amount
 (₹)
Monthly Deduction
 (₹)
Insurance Amount
 (₹)
10 and above
120
1,20,000
5000
50,00,000
6 to 9
60
60,000
2500
25,00,000
1 to 5
30
30,000
1500
15,00,000
14.    COMPARISON BETWEEN MINIMUM AND MAXIMUM PAY – 1:11.4 (18000 : 205400)

15.   NUMBER OF PAY SCALES – NOT REDUCED - NO DELAYERING

16.          CASUAL LEAVE – NO INCREASE

17.          CHILD Care Leave - 1st 365 days – Full pay (100%) -         Next 365 days – 80% Pay only.

18.          MATERNITY LEAVE – NO CHANGE - 

19.          LEAVE ENCASHMENT AT THE TIME OF RETIREMENT – NO INCREASE MAXIMUM 300 DAYS ONLY

20.          MEDICAL - Medical Insurance Scheme for serving and retired employees recommended.

21.          TRANSPORT ALLOWANCE - NO HIKE - ONLY 125% MERGER

Pay Level
Higher Transport Allowance cities (A, AI)
Other places
9 and above
7200 + DA
3600 + DA
3 to 8
3600 + DA
1800 + DA
1 and 2
1350 + DA
900 + DA

22.          LEAVE TRAVEL CONCESSION (LTC) – NO CHANGE -  Splitting of Home Town LTC for employees Posted in North East, Laddakh, Andaman & Nicobars and Lakshdweep allowed.

23. ACCOUNTS STAFF BELONGING TO UNORGANIZED ACCOUNTS INCLUDING SBCO STAFF – PARITY WITH ORGANISED ACCOUNTS REJECTED - The Commission has noted that the stipulated entry level qualification and recruitment process of Postal Assistants (SBCO) is similar to that of direct recruit Postal Assistants in the Postal Assistants’ cadre and their promotional channel is also identical. The Commission is therefore of the view that no up gradation is warranted

24.  PERIODICAL REVIEW OF WAGES (NOT TEN YEARS) RECOMMENDED. NO PAY COMMISSION REQUIRED

25.          PERFORMANCE RELATED PAY SHOULD BE INTRODUCED IN GOVERNMENT SERVICES AND ALL BONUS PAYMENT SHOULD BE LINKED TO PRODUCTIVITY - Productivity Linked Bonus for all.

26.          COMPULSORY RETIREMENT AND EFFICIENCY BAR REINTRODUCED - Failure to get required bench Mark for promotion within the first 20 years of service will result in stoppage of increment. Such employees who have out lived their ability, their services need not be continued and the continuance of such persons in the service should be discouraged.

27.          PROMOTEE AND DIRECT RECRUITS – ENTRY LEVEL PAY ANOMALY IS REMOVED
JCM (SS) demand – the differential entry pay between new recruits and promoted employees should be done away with.

28.          CADRE REVIEW TO BE COMPLETED IN A TIME BOUND MANNER - Commission recommended to hasten the process of cadre review and reduced the time taken in inter-ministerial consultations.

29.          NEW PENSION SCHEME – WILL CONTINUE

30.          CEA & HOSTEL SUBSIDY Rate
CEA per month             2250 - 25% increase when DA crosses
Hostel subsidy              6750 – 50& increase when DA crosses  

31.     IPO/ASP/SP SCALE UPGRADED : Commission has noted that the VI CPC had placed Inspector (Posts) at par with Inspector of CBDT/CBED. Subsequently the Inspector of CBDT/CBE were elevated to GP 4600. The Commission has further noted that the Inspector of Posts and Inspector of CBDT/CBED are recruited through the same combined graduate level examination. Therefore the commission recommended 4600 GP for IP and 4800 GP and 5400 GP for SPOs.

32. ADDITIONAL WORK ALLOWANCE  - 2% of the Basic Pay per month - 10% of the Basic pay if period exceeds 45 days.

33DAILY ALLOWANCE:
LEVEL
ACCOMMODATION CHARGES
TRAVELLING CHARGES
DAILY ALLOWANCE LUMP SUM AMOUNT
14 and above 7500
7500
AC Taxi charges up to 50 km
1200
12 and 13 4500
4500
Non-AC Taxi charges up to 50 km
1000
9 to 11 2250
2250
338 per day
900
6 to 8 750
750
225 per day
800
5 and below 450
450
113 per day
500
NOTE: The Lump sum amount will increase by 25 percent whenever DA increases by 50 percent.

34Regarding Personal and HBA interest-bearing advances, the following is recommended
NAME OF THE ADVANCE
RECOMMENDED CEILING
RECOMMENDATIONS
PC Advance
50,000 or actual price
of PC, whichever is
lower
May be allowed maximum five times in the
entire service.
HBA
34 times Basic Pay

OR

25 lakh

OR
anticipated price of
house, whichever is
least
The requirement of minimum 10 years of continuous service to avail of HBA should be
reduced to 5 years.

If both spouses are government servants,
HBA should be admissible to both separately.

Existing employees who have already taken
Home Loans from banks and other financial
institutions should be allowed to migrate to
this scheme.

35. GDS: The Supreme Court judgment also states that GDS are only holders of civil posts but not civilian employees. The Commission endorses this view and therefore has no recommendation with regard to GDS

PENSIONARY BENEFITS

1 .  PENSIONERS – PARITY – LONG STANDING DEMAND OF THE PENSIONERS ACCEPTED - The Commission recommends a revised pension formulation for civil employees including CAPF personnel as well as for Defence personnel, who have retired before 01.01.2016. This formulation will bring about parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.
The past pensioners shall first be fixed in the Pay Matrix being recommended by the Commission on the basis of Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the pay matrix.
This amount shall be raised to arrive at the notional pay of retirees, by adding number of increments he/she had earned in that level while in service at the rate of 3 percent.
Fifty percent of the total amount so arrived at shall be the new pension.
An alternative calculation will be carried out, which will be a multiple of 2.57 times of the current basic pension. The pensioner will get the higher of the two

2 .          PENSIONERS – MINIMUM PENSION RS. 9000/- (50% of the minimum pay recommended by the
                7th CPC)
3. .          PENSIONERS – GRATUITY  - Enhancement in the ceiling of gratuity from the existing ₹10 lakh to ₹20 lakh. The ceiling on gratuity may be raised by 25 percent whenever DA rises by 50 percent.
4..          PENSIONERS – FIXED MEDICAL ALLOWANCE (FMA) – NO CHANGE (RS. 500/-

5.          Introduction of a Health Insurance Scheme for Central Government employees and pensioners has been recommended - Meanwhile, for the benefit of pensioners residing outside the CGHS areas, CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis.   All postal pensioners should be covered under CGHS. All postal dispensaries should be merged with CGHS.

6. Ex-gratia Lump sum Compensation to Next of Kin: The Commission is recommending the revision of rates of lump sum compensation for next of kin (NOK) in case of death arising in various circumstances relating to performance of duties, to be applied uniformly for the defence forces personnel and civilians including CAPF personnel.

7. New Pension System: The Commission received many grievances relating to NPS. It has recommended a number of steps to improve the functioning of NPS. It has also recommended establishment of a strong grievance redressal mechanism.

8.. Performance Related Pay: The Commission has recommended introduction of the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents, reformed Annual Performance Appraisal Reports and some other broad Guidelines. The Commission has also recommended that the PRP should subsume the existing Bonus schemes.

                                                           

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