The demand to increase the 2.57 Fitment Factor along with the hike of 14.29 percent is growing among the Central Government employees

The 900-page long report of the 7th Pay Commission was submitted to the government on November 19. One of the most important recommendation on the report is the Fitment Factor. It is the most important factor deciding the hike of salaries of the Central Government employees.

Fitment Factor is used to calculate the revised basic pay of existing employees with effect from the implementation of 7th CPC. The new revised basic pay of a Central Government employee is calculated by multiplying his/her cureent (Pre-revised) basic pay with the Fitment Factor.

The 7th Pay Commission has recommended a uniform Fitment Factor of 2.57 for all. The actual raise/fitment recommended by the Commission is 14.29 percent only. The report says that the fitment includes a factor of 2.25 on account of DA neutralisation, assuming that the rate of D.A. would be 125 percent at the time of implementation of the new pay.

The 7th Pay Commission has evolved a new pay fitment table by merging the existing Grade Pay and Pay Bands for all group of Central Government employees, which is called as Pay Matrix Table. The Pay Matrix comprises two dimensions. It has a “horizontal range” in which each level corresponds to a ‘functional role in the hierarchy’ and has been assigned the numbers 1, 2, 3, and so on till 18. The “vertical range” for each level denotes ‘pay progression’ within that level. These indicate the steps of annual financial progression of three percent within each level. The starting point of the matrix is the minimum pay which has been arrived based on 15th Indian Labour Congress (ILC) norms or the Aykroyd formula.

On recruitment, an employee joins at a particular level and progresses within the level as per the vertical range. The movement is usually on an annual basis, based on annual increments till the time of their next promotion. When the employee receives a promotion or a non-functional financial upgrade, he/she progresses one level ahead on the horizontal range.

The Pay Matrix chart has included a number of Fitment Factors. 6 types of Fitment Factor, including 2.57, 2.62, 2.67, 2.72, 2.78, and 2.81, have been listed. Under the heading of ‘Index,’ all the Central Government employees have been divided into 18 categories. Since different Fitment Factors have been used for all these categories, it leads one to believe that the new factor will apply for the existing employees too.

Criticism has come from all the circles over the addition of a mere 14.29%, leading to 2.57, while the employees were currently drawing a dearness allowance of 125% of their basic pay. The minimum wages have been decided on this criterion alone (the 6th Pay Commission had fixed the minimum wages as Rs.7000. The 7th CPC minimum wages of 18,000 has been arrived at by multiplying the previous number by 2.57).

One might remember that similar requests were presented at the time of the 6th Pay Commission too. The commission had recommended the Fitment Factor of 1.74, but, due to constant pressure from the NC JCM Staff Side members, it was increased to 1.86. The demand to increase the 2.57 Fitment Factor along with the 14.29 percent hike is growing among the Central Government employees.

(First published this article on 24.12.2015 11.40pm)

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With 7th Pay Commission’s recommendations being approved by Cabinet today, FM Arun Jaitley has tweeted his congratulations…

With 7th Pay Commission’s recommendations being approved by Cabinet today, FM Arun Jaitley has tweeted his congratulations to the 1 crore government employees and pensioners who will greatly benefit from this hike.

“Congratulations to central government officers, employees & pensioners on a historic rise in their salary & allowances through the 7th CPC,” FM Jaitley tweeted.

According to sources, the government has approved a minimum pay hike of 20% and a maximum of 25%. The 7th Pay Commission’s recommendations are effective from January 1, 2016.

In percentage terms the overall increase in pay & allowances and pensions will be 23.55 per cent. In finer details, the increase in pay is slated to be 16 per cent, increase in allowances will be 63 per cent, and increase in pension would be 24 per cent, the recommendations said.

The minimum pay in government has been recommended at Rs 18,000 per month. A maximum Rs 2,25,000 per month for apex scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level have been recommended.

The recommendations were submitted by the Empowered Committee of Secretaries, which was formed to look into recommendations of the Seventh Pay Commission.

Source : http://www.financialexpress.com/

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7th Pay Commission latest news today: Defence Minister Manohar Parrikar reacts to discontent within armed forces regarding salary & pension hike

New Delhi, June 29: Union Cabinet has cleared the revised recommendations of 7th Pay Commission. The final CPC report has reportedly disappointed the armed forces, as the Empowered Committee of Secretaries has failed to incorporate their demands. Defence Minister Manohar Parrikar has attempted to reconcile the voices of dissent propping up.

“We had pushed forward their demands with full force. Some of them have been accepted. Some haven’t been taken. The Finance Ministry will look into it,” he said.

Former Chief of Army Staff, General Roy Chowdhury lashed out at the Secretaries Panel for failing to do justice with the defence personnels. The Uniform Pay Matrix has not been taken into account. The ‘Allowances’ have not been brought at par with civilian employees. The much-awaited demand of parity in disability allowance have also been ignored.

The various anomalies in fixation of pay and pensions has created a discontent within the armed forces and ex-servicemen. By not implementing the Uniform Pay Matrix, government has allowed the Defence Pay Matric to be restricted to 24 pay levels, whereas, the bureaucratic pay level is 40. This not only stagnates the salary hike after 31 years of service, but decreases the pension amount by at least Rs 20,000 as compared to civilian employees.

Similarly, the parity in allowances between uniformed forces and civilian employees was a long pending demand. A CAPF DIG posted Leh gets Rs 57,000 in form of allowances. But a brigadier gets only Rs 17,000. The disability pension for Additional Secreatry is Rs 60,000, but for a Lt General, it is only Rs 27,000.

Source : http://www.india.com/

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The Cabinet is likely to approve the 7th Pay Commission award in its entirety soon. Although the pay increases recommended by the commission will take effect from January 1, 2016, the Centre may choose to disburse the increased allowances only prospectively, official sources said.

If the revised allowances take effect only from, say, September this year, the savings to the exchequer would be to the tune of Rs 11,000 crore. Additionally, if the railway ministry decided to toe the Centre’s line, the national transporter will save around Rs 3,800 crore.

The salary revision, which will benefit about 50 lakh government employees and 58 lakh pensioners, is expected to boost consumption demand and help achieve higher economic growth in FY17.

Allowances are currently roughly half of the Centre’s salary bill; as per the pay panel’s award, the steepest increase — 63% — was in allowances, while the overall rise in pay, allowances and pensions recommended was 23.55%.

The Budget in February had provided `53,500 crore towards the pay panel-induced overall rise in pay, allowances and pension (PAP) and also to finance the one-rank-one-pension scheme for the armed forces. The commission, in its November 2015 report, had estimated the additional outgo in FY17 due to its award at `73,650 crore.

“A Committee of Secretaries (headed by the Cabinet secretary PK Sinha), has finalised its report on Pay Commission recommendations… We will soon make a draft Cabinet note based on the report,” finance secretary Ashok Lavasa said. Sources said the report will be considered by the Cabinet as early as Wednesday. The committee was set up in January.

While there is no official word on the exact provision made in budget for higher pay, Lavasa in a recent interview to FE said that its premature to say whether the provisions made in the budget are adequate or not to meet the pay panel requirements.

Source : http://www.financialexpress.com/

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The Union Cabinet is expected to take up on Wednesday the Empowered Committee of Secretaries’s report on the 7th Pay Commission.

The Empowered Committee of Secretaries, which was formed to look into recommendations of the Seventh Pay Commission, has finalised its report, Finance Secretary Ashok Lavasa said.

Here is everything you need to know about the proposed recommendations in the 7th Pay Commission. Read more to find out what the Pay Commission changes are, if accepted by the Cabinet.

Date of implementation

The recommended date of implementation is January 1, 2016. So, government employees will get arrears from January this year.

Minimum Pay

Based on the Aykroyd formula, the minimum pay in government is recommended to be set at Rs 18,000 per month.

Maximum Pay

Rs 2,25,000 per month for Apex Scale and Rs 2,50,000 per month for Cabinet Secretary and others presently at the same pay level.

What are the financial implications?

The total financial impact in the FY 2016-17 is likely to be Rs 1,02,100 crore, over the expenditure as per the Business As Usual scenario. Of this, the increase in pay would be Rs 39,100 crore, increase in allowances would be Rs 29,300 crore and increase in pension would be Rs 33,700 crore.

Out of the total financial impact of Rs 1,02,100 crore, Rs 73,650 crore will be borne by the General Budget and Rs 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 per cent. Within this, the increase in pay will be 16 per cent, increase in allowances will be 63 per cent, and increase in pension would be 24 per cent.

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 per cent in case of 6th Central Pay Commission.

What is the New Pay Structure?

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 per cent.

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:

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

A 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:

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 per cent 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 per cent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 per cent and 10 per cent when DA crosses 100 per cent.

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 also been placed on simplifying the process of claiming allowances.

Advances: a. All non-interest bearing Advances have been abolished. b. Regarding interest-bearing Advances, only Personal Computer Advance and House Building Advance (HBA) have been retained. HBA ceiling has been increased to Rs 25 lakh from the present Rs 7.5 lakh.

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:

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 Rs 10 lakh to Rs 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 Rs 4,50,000 and Rs 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.

Source:  Indian express

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