THE Union Cabinet on Wednesday approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits, something that will benefit 47 lakh Central government employees and 53 lakh pensioners, and give a burden of Rs 102,000 crore in 2016-17 on the exchequer. An officer will now get an entry level basic salary of Rs 56,100 per month whereas India's top bureaucrat -- cabinet secretary’s salary will be Rs 2.5 lakh per month. The cabinet however did not take a call on pay parity of IAS with other Central services and did not buy the Commission’s argument of mass abolition of old-fashioned allowances. Here are 10 key takeaways of the pay hike:1. The pay hike will come into effect from January 1, 2016. And the hike, with arrears, will be reflected in the salary of the Central government employees sometime soon, and definitely in the current fiscal.
2. The recommendations will benefit over 1 crore employees. They include over 47 lakh Central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.
3. The minimum pay has been increased from Rs 7000 to 18,000 per month. Starting salary of a newly recruited employee at lowest level will now be Rs 18,000 per month whereas for a freshly recruited Class I officer, it will be Rs 56,100.
4. Rate of increment has been retained at 3%. This will benefit the employees in future on account of higher basic pay as the annual increments that they earn in future will be 2.57 times than at present.
5. Gratuity ceiling has been enhanced from Rs 10 to 20 lakh. The ceiling on gratuity will increase by 25% whenever DA rises by 50%.
6. Ceiling of house building advance has been enhanced from Rs 7.50 lakh to 25 lakh.
7. In order to ensure that no hardship is caused to employees, four interest free advances viz Advances for Medical Treatment, TA on tour/transfer, TA for family of deceased employees and LTC have been retained. All other interest free advances have been abolished.
8. The Cabinet decided to constitute a committee headed by finance secretary for further examination of the recommendations of 7th CPC on allowances. The Commission examined a total of 196 existing Allowances and, by way of rationalization, recommended abolition of 51 allowances and subsuming of 37 allowances. Given the significant changes in the existing provisions for allowances which may have wide ranging implications, the committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing allowances will continue to be paid at the existing rates.
9. The Cabinet also decided to constitute two separate committees (i) to suggest measures for streamlining the implementation of National Pension System (NPS) and (ii) to look into anomalies likely to arise out of implementation of the Commission’s report.
10. The Cabinet also decided not to accept the steep hike in monthly contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) recommended by the Commission. The existing rates of monthly contribution will continue. This will increase the take home salary of employees at lower levels by Rs 1,470.