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Highlights of Recommendations of Seventh Central Pay Commission



Highlights of Recommendations of Seventh Central Pay Commission 
Recommended Date of implementation: 01.01.2016
Minimum Pay: Based on the Aykroyd formula, the minimum pay in government is recommended to be set at ₹18,000 per month.
Maximum Pay: ₹2,25,000 per month for Apex Scale and ₹2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

Financial Implications:
The total financial impact in the FY 2016-17 is likely to be ₹1,02,100 crore, over the expenditure as per the ‘Business As Usual’ scenario.  Of this, the increase in pay would be ₹39,100 crore, increase in allowances would be ₹ 29,300 crore and increase in pension would be ₹33,700 crore.
Out of the total financial impact of 1,02,100 crore, 73,650 crore will be borne by the General Budget and 28,450 crore by the Railway Budget.
In percentage terms the overall increase in pay & allowances and pensions over the ‘Business As Usual’ scenario will be 23.55 percent. Within this, the increase in pay will be 16 percent, increase in allowances will be 63 percent, and increase in pension would be 24 percent.
The total impact of the Commission’s recommendations are expected to entail an increase of 0.65 percentage points in the ratio of expenditure on (Pay+Allowances+ Pension) to GDP compared to 0.77 percent in case of VI CPC.

New Pay Structure: 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.

Fitment: A fitment factor of 2.57 is being proposed to be applied uniformly for all employees.
Annual Increment: The rate of annual increment is being retained at 3 percent.
Modified Assured Career Progression (MACP)
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.
Military Service Pay (MSP): The Military Service Pay, which is a compensation for the various aspects of military service, will be admissible to the Defence forces personnel only. As before, Military Service Pay will be payable to all ranks up to and inclusive of Brigadiers and their equivalents. The current MSP per month and the revised rates recommended are as follows:

Present
Proposed
i.
Service Officers      
₹6,000
₹15,500
ii.
Nursing Officers      
₹4,200
₹10,800
iii.
JCO/ORs   
₹2,000
₹  5,200
iv.
Non Combatants (Enrolled) in the Air Force
₹1,000
₹  3,600
Short Service Commissioned Officers: Short Service Commissioned Officers will be allowed to exit the Armed Forces at any point in time between 7 and 10 years of service, with a terminal gratuity equivalent of 10.5 months of reckonable emoluments. They will further be entitled to a fully funded one year Executive Programme or a M.Tech. programme at a premier Institute.
Lateral Entry/Settlement: The Commission is recommending a revised formulation for lateral entry/resettlement of defence forces personnel which keeps in view the specific requirements of organization to which such personnel will be absorbed. For lateral entry into CAPFs an attractive severance package has been recommended.
Headquarters/Field Parity: Parity between field and headquarters staff recommended for similar functionaries e.g Assistants and Stenos.
Cadre Review: Systemic change in the process of Cadre Review for Group A officers recommended.
Allowances: The Commission has recommended abolishing 52 allowances altogether. 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.
      Risk and Hardship Allowance: Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance.
The current Siachen Allowance per month and the revised rates recommended are as follows:


Present
Proposed
i.
Service Officers
₹21,000
₹31,500
iii.
JCO/ORs
₹14,000
₹21,000

This would be the ceiling for risk/hardship allowances and there would be no individual RHA with an amount higher than this allowance.
House Rent Allowance: 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.
In the case of PBORs of Defence, CAPFs and Indian Coast Guard compensation for housing is presently limited to the authorised married establishment hence many users are being deprived. The HRA coverage has now been expanded to cover all.
Any allowance not mentioned in the report shall cease to exist.
Emphasis has been placed on simplifying the process of claiming allowances.
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.
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

Medical Facilities:
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.
Pension: 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.
In the case of defence forces personnel this amount will include Military Service Pay as admissible.
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.
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.
Disability Pension for Armed Forces: The Commission is recommending reverting to a slab based system for disability element, instead of existing percentile based disability pension regime.
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.
Martyr Status for CAPF Personnel: The Commission is of the view that in case of death in the line of duty, the force personnel of CAPFs should be accorded martyr status, at par with the defence forces personnel.
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.
Regulatory Bodies The Commission has recommended a consolidated pay package of ₹4,50,000 and ₹4,00,000 per month for Chairpersons and Members respectively of select Regulatory bodies. In case of retired government servants, their pension will not be deducted from their consolidated pay. The consolidated pay package will be raised by 25 percent as and when Dearness Allowance goes up by 50 percent. For Members of the remaining Regulatory bodies normal replacement pay has been recommended.
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.
There are few recommendations of the Commission where there was no unanimity of view and these are as follows:
The Edge: An edge is presently accordeded to the Indian Administrative Service (IAS) and the Indian Foreign Service (IFS) at three promotion stages from Senior Time Scale (STS), to the Junior Administrative Grade (JAG) and the NFSG.  is recommended by the Chairman, to be extended to the Indian Police Service (IPS) and Indian Forest Service (IFoS).
Shri Vivek Rae, Member is of the view that financial edge is justified only for the IAS and IFS. Dr. Rathin Roy, Member is of the view that the financial edge accorded to the IAS and IFS should be removed.
Empanelment: The Chairman and Dr. Rathin Roy, Member, recommend that All India Service officers and Central Services Group A officers who have completed 17 years of service should be eligible for empanelment under the Central Staffing Scheme and there should not be “two year edge”, vis-à-vis the IAS. Shri Vivek Rae, Member, has not agreed with this view and has recommended review of the Central Staffing Scheme guidelines.
Non Functional Upgradation for Organised Group ‘A’ Services: The Chairman is of the view that NFU availed by all the organised Group `A’ Services should be allowed to continue and be extended to all officers in the CAPFs, Indian Coast Guard and the Defence forces. NFU should henceforth be based on the respective residency periods in the preceding substantive grade. Shri Vivek Rae, Member and Dr. Rathin Roy, Member, have favoured abolition of NFU at SAG and HAG level.
Superannuation: Chairman and Dr. Rathin Roy, Member, recommend the age of superannuation for all CAPF personnel should be 60 years uniformly. Shri Vivek Rae, Member, has not agreed with this recommendation and has endorsed the stand of the Ministry of Home Affairs.
The full report is available in the website, http://7cpc.india.gov.in.

*********
Report of the Kelkar Committee on Revisiting & Revitalizing the PPP model of Infrastructure Development submitted to the Finance Minister today in New Delhi .

 In the Union Budget 2015-16, Finance Minister announced that the PPP mode of infrastructure development has to be revisited, and revitalized.  In pursuance of this announcement, a Committee was constituted with the following members:

1
Dr. Vijay Kelkar, Chairman, National Institute of Public Finance & Policy, New Delhi

Chairman
2
Shri C.S. Rajan, Chief Secretary, Government of Rajasthan
Member

3
Shri S.B. Nayar, CMD, IIFCL, New Delhi
Member

4
Dr. Shekar Shah, Director General, NCAER
Member

5
Shri Pradeep Kumar, MD, CBG, State Bank of India
Member

6
Representative of Ministry of Road Transport & Highways – not below the rank of Joint Secretary

Member
7
Shri Vikram Limaye, MD, IDFC
Member

8
Shri Sudipto Sarkar, Barrister-at-law, Kolkata
Member



9
Ms. P.S. Behuria, IRS (Retd.)
Member

10
Ms. Sharmila Chavaly, Joint Secretary, Department of Economic Affairs, Ministry of Finance, New Delhi
Member- Secretary

            The Terms of Reference of the Committee are as follows:
(i)      Review of the experience of PPP Policy, including the variations in contents of contracts and difficulties experienced with particular variations/conditions, if any,

(ii)    Analysis of risks involved in PPP projects in different sectors and existing framework of sharing of such risks between the project developer and the Government, thereby suggesting optimal risk sharing mechanism,

(iii)   Propose design modifications to the contractual arrangements of the PPP based on the above, and international best practices and our institutional context, and

(iv)  Measure to improve capacity building in Government for effective implementation of the PPP projects.


The Committee had extensive consultations with various stake holders across the PPP spectrum, invited suggestions and views of experts, reviewed projects and sectors and researched best practices in India and abroad while firming up its recommendations. 

The Committee presented its Report to the Finance Minister on 19th November 2015. The Government will examine the Report and take appropriate action.

********
States Need to Bring about Ease of Business to Prosper: Shri Arun Jaitley

Finance,Corporate Affairs and Information & Broadcasting Minister Shri Arun Jaitley Inaugurates Resurgent Rajasthan Partnership Summit 2015 in Jaipur 
Union Finance, Corporate Affairs and Information & Broadcasting Minister Shri Arun Jaitley has said that India has been following a policy of attracting investment by easening the processes and the States should follow the same policy, thereby cutting down the time period during investment process. Investors have a choice in selecting the place and different states are competing with each other. Inaugurating the Resurgent Rajasthan Partnership Summit held in Jaipur on 19th November 2015,Shri Jaitley said that Rajasthan should become a pioneer in terms of ease of business.

Due to aspirational constituency supporting growth , reforms and change increasing, Shri Jaitley said that amount of public support has also gone up. Governments have to easen, make sure that governance is corruption free and to make sure that our taxes are justified and also to make sure that all facilities like land etc. are made available in a non-discretionary manner.

Speaking on Rajasthan Shri Arun Jaitley said that Rajasthan is a land of history and its cities and villages literally symbolize history. It is the ability of the people of Rajasthan to go to all over the country and the world and multiply money and make their roots proud. He urged the states to adopt such a model of growth wherein there is more investment from the private sector. Rajasthan has found its core areas –solar power, wind energy, tourism among others which will help Rajasthan grow.

Speaking on the occasion Shri M. Venkaiah Naidu, Union Minister of Urban Development, Housing and Urban Poverty extended all support from the Union Government to the State of Rajasthan. He said that under the principle of Cooperative Competitive Federalism, the states have to grow and prosper together. Industries are equal partners in the development of the country. Shri Naidu said that his Ministry has taken several initiatives under Urban Renewal Programme such as Swaccha Bharat, Smart Cities, AMRUT and UDAI. Out of the 100 cities selected under Smart Cities, 4 are from Rajasthan. Applauding the efforts of Government of Rajasthan, he said that Rajasthan is the first state to sign MOU for promoting housing project.

Shri Ananth Kumar, Union Chemicals & Fertilizers Minister announced the setting up of National Institute of Pharma Education and Research in Jhalawar in Rajasthan with an investment of Rs.500 Crores. This institute would be of International standards, he said. He also announced expansion of the Central Institute of Plastics Engineering &Technology in Jaipur with and additional investment of Rs.100 Crores for running Masters and B.Tech Engineering Courses in the field of Plastic Engineering. He also informed about the allocation of 12 lakh metric tonnes of Urea this year for the State of Rajasthan. In addition to the above announcements, he said that if the state government provides land of 100 acres, his Ministry is willing to have a Plastic Park in Bhiwadi and a Medical Devices Park in Rajasthan.

Union Railways Minister Shri Suresh Prabhu said that Railways is committed to offer all support to Government of Rajasthan. Rajasthan is a tourism state and Railways is providing logistic support for development of tourism.

Chief Minister of Rajasthan Smt. Vasundhara Raje said , “under the able stewardship of Prime Minsiter, Shri Narendra Modi,the Union Government is nurturing an ecosystem of strong empowered states”. She said that the Rajasthan Model of Development rests on the triad of Social Justice, Effective Governance and Job Creation.

Also present on the occasion were Governor of Rajasthan Shri Kalyan Singh, Minister of State for Information & Broadcasting Col. Rajyavardhan Rathore, Home and Law Minister of Singapore Shri K.Shanmugan and top Industrialists of the Country. 

***********
Exchange Rate of Foreign Currency Relating to Imported and Export Goods Notified 

In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Central Board of Excise & Customs No.106/2015-CUSTOMS (N.T.), dated 5th November, 2015, except as respects things done or omitted to be done before such supersession, the Central Board of Excise & Customs hereby determines that the rate of exchange of conversion of each of the foreign currencies specified in column (2) of each of Schedule I and Schedule II annexed hereto, into Indian currency or vice versa, shall, with effect from 20th November, 2015, be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

SCHEDULE-I
Sl.No.
Foreign Currency
Rate of exchange of one unit of foreign currency equivalent to Indian rupees
(1)    
(2)
(3)


               (a)
                (b)


(For Imported Goods)
  (For Export Goods)
1.
Australian Dollar
48.00
46.80
2.
Bahrain Dinar
180.70
170.25
3.
Canadian Dollar 
50. 40
49.35
4.
Danish Kroner
9.60
9.35
5.
EURO
71.70
69.90
6.
Hong Kong Dollar
8.60
8.45
7.
Kuwait Dinar
223.90
211.65
8.
New Zealand Dollar
43.85
42.65
9.
Norwegian Kroner
7.75
7.55
10.
Pound Sterling
102.35
100.10
11.
Singapore Dollar
47.20
46.15
12.
South African Rand
4.80
4.55
13.
Saudi Arabian Riyal
18.15
17.15
14.
Swedish Kroner
7.70
7.50
15.
Swiss Franc
65.85
64.35
16.
UAE Dirham
18.55
17.50
17.
US Dollar
66.70
65.65




 SCHEDULE-II

 Sl.No.
Foreign Currency
Rate of exchange of 100 units of foreign currency equivalent to Indian rupees
(1)    
(2)
(3)


(a)
(b)


(For Imported Goods)
  (For Export Goods)
1.
Japanese Yen

54.30
53.10
2.
Kenya Shilling

66.65
62.90


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