Changes in Pay Structure and Revision of the three Pay Matrices – (2.57 to 2.67.)
Modifications
in the 7th CPC recommendations on pay and pensionary benefits approved by the
Cabinet on 3rd May, 2017
The Union Cabinet chaired by the Prime Minister
Shri Narendra Modi approved important proposals relating to modifications in
the 7th CPC (Central Pay Commission) recommendations on pay and pensionary
benefits in the course of their implementation. Earlier, on 29th June, 2016,
the Cabinet had approved implementation of the recommendations with an
additional financial outgo of ₹84,933 crore for 2016-17 (including arrears for
2 months of 2015-16).
The benefit of the proposed
modifications will be available with effect from 1st January, 2016, i.e., the
date of implementation of 7th CPC recommendations. With the increase approved
by the Cabinet, the annual pension bill alone of the Central Government is
likely to be ₹1,76,071 crore.Some of the important decisions of the Cabinet are
mentioned below:
1. Revision of pension of pre – 2016 pensioners and family
pensionersThe Cabinet approved
modifications in the recommendations of the 7th CPC relating to the method of
revision of pension of pre-2016 pensioners and family pensioners based on
suggestions made by the Committee chaired by Secretary (Pensions) constituted
with the approval of the Cabinet. The modified formulation of pension revision
approved by the Cabinet will entail an additional benefit to the pensioners and
an additional expenditure of approximately ₹5031 crore for 2016-17 over and
above the expenditure already incurred in revision of pension as per the second
formulation based on fitment factor. It will benefit over 55 lakh pre-2016
civil and defence pensioners and family pensioners.
While approving the implementation of the 7th
CPC recommendations on 29th June, 2016, the Cabinet had approved the changed
method of pension revision recommended by the 7th CPC for pre-2016 pensioners,
comprising of two alternative formulations, subject to the feasibility of the
first formulation which was to be examined by the Committee.
In terms of the Cabinet decision, pensions of
pre-2016 pensioners were revised as per the second formulation multiplying
existing pension by a fitment factor of 2.57, though the pensioners were to be
given the option of choosing the more beneficial of the two formulations as per
the 7th CPC recommendations.
In order to provide the more beneficial option
to the pensioners, Cabinet has accepted the recommendations of the Committee,
which has suggested revision of pension based on information contained in the
Pension Payment Order (PPO) issued to every pensioner. The revised procedure of
fixation of notional pay is more scientific, rational and implementable in all
the cases. The Committee reached its findings based on an analysis of hundreds
of live pension cases. The modified formulation will be beneficial to more
pensioners than the first formulation recommended by the 7th CPC, which was not
found to be feasible to implement on account of non-availability of records in
a large number of cases and was also found to be prone to several anomalies.
2. Disability Pension for Defence Pensioners
The Cabinet also approved the retention of
percentage-based regime of disability pension implemented post 6th CPC, which
the 7th CPC had recommended to be replaced by a slab-based system.
The issue of disability pension was referred to
the National Anomaly Committee by the Ministry of Defence on account of the
representation received from the Defence Forces to retain the slab-based
system, as it would have resulted in reduction in the amount of disability
pension for existing pensioners and a reduction in the amount of disability
pension for future retirees when compared to percentage- based disability
pension.
The decision which will benefit existing and
future Defence pensioners would entail an additional expenditure of
approximately ₹130 crore per annum.
3. Changes in Pay Structure and Revision of the
three Pay Matrices:
The Cabinet, while approving the 7th CPC
recommendations for their implementation on 29th June, had made two
modifications in the Defence Pay Matrix as under:
(i) Index of Rationalisation (IOR) of Level 13A (Brigadier) may be increased
from 2.57 to 2.67.
(ii) Additional 3 stages in Levels 12A (Lt.
Col.), 3 stages in Level 13 (Colonel) and 2 stages in Level 13A (Brigadier) may
be added.
The Cabinet has now approved further
modifications in the pay structure and the three Pay Matrices, i.e. Civil,
Defence and Military Nursing Service (MNS). The modifications are listed below:
(i) Defense Pay Matrix has been extended to 40
stages similar to the Civil Pay Matrix: The 7th CPC had recommended a compact
Pay Matrix for Defence Forces personnel keeping in view the number of levels,
age and retirement profiles of the service personnel. Ministry of Defence
raised the issue that the compact nature of the Defence Pay Matrix may lead to
stagnation for JCOs in Defence Forces and proposed that the Defence Pay Matrix
be extended to 40 stages. The Cabinet decision to extend the Defence Pay Matrix
will benefit the JCOs who can continue in service without facing any stagnation
till their retirement age of 57 years.
(ii) IOR for Levels 12 A (Lt. Col. and equivalent)
and 13 (Colonel and equivalent) in the Defence Pay Matrix and Level 13
(Director and equivalent) in the Civil Pay Matrix has been increased from 2.57
to 2.67: Variable IOR ranging from 2.57 to 2.81 has been applied by the 7th CPC
to arrive at Minimum Pay in each Level on the premise that with enhancement of
Levels from Pay Band 1 to 2, 2 to 3 and onwards, the role, responsibility and
accountability increases at each step in the hierarchy. This principle has not
been applied in respect of Levels 12A (Lt. Col. and equivalent), 13 (Colonel
and equivalent) and 13A (Brigadier and equivalent) of Defence Pay Matrix and
Level 13 (Director and equivalent) of the Civil Pay Matrix on the ground that
there was a disproportionate increase in entry pay at the level pertaining to
GP 8700 in the 6th CPC regime. The IOR for Level 13A (Brigadier and equivalent)
in the Defence Pay Matrix has already been revised upwards with the approval of
the Cabinet earlier. In view of the request from Ministry of Defence for
raising the IOR for Levels 12 A and 13 of the Defence Pay Matrix and requests
from others, the IOR for these levels has been revised upwards to ensure
uniformity of approach in determining the IOR.
(iii) To give effect to the decisions to extend the Defence Pay Matrix and to
enhance the IORs, the three Pay Matrices – Civil, Defence and MNS – have also
been revised. While doing so, two calculation errors noticed in the MNS Pay
Matrix have also been rectified.
(iv) To ensure against reduction in pay, benefit
of pay protection in the form of Personal Pay was earlier extended to officers
when posted on deputation under Central Staffing Scheme (CSS) with the approval
of Cabinet. The benefit will also be available to officers coming on Central
Deputation on posts not covered under the CSS.
