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Sunday, 26 April 2009 12:58

Govt's I-Day bonanza for civil, defence staff

Thursday , August 14, 2008 at 03:46:36

New Delhi, August 14: Offering a bonanza to its about 55 lakh employees, the government on Thursday approved new pay scales that would give them an average increase of 21 per cent, a move that would cost the exchequer Rs 22,131 crore.

The windfall pay revision, announced on the eve of the country's 62nd Independence Day, would be implemented from September 1, this year and the government employees would get 32 months' arrears, that too with significant improvements over the Sixth Pay Commission recommendations.

The Union Cabinet approved the effective date for the pay revision as January 1, 2006 and central government employees and armed forces personnel would get 40 per cent of the arrears this fiscal and the remaining 60 per cent next fiscal.

Finance Minister P Chidambaram said the impact of revised pay scales on inflation was taken into account when the government cleared the recommendations and the Budget deficit targets would also be adhered to.

Both the Union Budget and Railway Budget have a capacity to bear the burden on account of implementation of revised pay scale for central government employees, he told reporters after the Cabinet meeting.

He said the burden on Union Budget will be Rs 15,717 crore and Rs 6,414 crore on Railway budget for 2008-09.

Following the revision of pay scales, total emoluments of a government employee including allowances at the lowest level will exceed Rs 10,000 per month.

Government has also fixed the annual increment for employees at 3 per cent, up from 2.5 per cent recommended by the Commission, which had submitted its report in March.

While modifying the recommendations, the government has accepted the suggestion of the pay panel for four pay bands with 20 grade pays.

"The overall average increase is 21 per cent," Expenditure Secretary Sushma Nath said. The fitment rate will be 40 per cent as against 28 per cent recommended by the Sixth Pay Commission.

The government's present salary bill is over Rs 70,000 crore and the pension bill is over Rs 30,000 crore.

At least three promotions have been assured for all defence forces' personnel and civilian employees under the modified Assured Career Progression (ACP) scheme. While the civilians would get it after 10, 20 and 30 years of service, the defence forces' jawans would get ACP in 8, 16 and 24 years.

The Commission, for the first time, recommended Military Service Pay (MSP) for armed forces personnel. The Cabinet has increased the rate of MSP for PBORs to Rs 2000 from Rs 1000.

Officers of the defence forces would get an MSP of Rs 6,000 over and above their pay per month.

Middle level officers of the defence forces namely colonels and brigadiers have been placed in the highest pay band of PB-4. Senior Lt.Generals overlooked for promotions as Army Commanders due to lack of residual service would now get the grade of Army Commander (Secretary's Grade), an official statement said.

In the case of Major Generals/Lt Generals, MSP will be taken into account notionally for fixation of pay as on January 1, 2006.

Other decisions taken by the Cabinet with regard to the pay scale includes the doubling of lowest limit of disability pension for defence personnel to Rs 3100 a month.

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Windfall for bureaucrats as PM goes beyond Pay Panel

Amitav Ranjan

Thursday , August 14, 2008 at 09:39:00

New Delhi, August 14: A wage hike higher than those recommended by the Sixth Pay Commission, marginal increase in annual increments and the payment of arrears in cash are some of the sweeteners incorporated in the proposal for Thursday's Cabinet meeting after Prime Minister Manmohan Singh?s intervention.

The new pay package for the 55 lakh Central government employees, to be announced on August 15, proposes a 20 per cent raise over the pay bands suggested by the Commission. The panel in May suggested a gross 40 per cent hike, which means an effective 25 per cent after taxes. ?The net jump in pay would be upwards of 30 per cent with the additional increase more for lower grade staff to narrow their difference with the (pay of) senior officials,? said sources.

This raise takes into account the Commission?s miscalculation of the dearness allowance - absorbed in the new basic pay?as 74 per cent whereas it should have been 83 per cent, they said. The proposed annual increment in the basic pay would also be a tad higher than the 2.5 per cent suggested by the Commission.

The Cabinet proposal talks of a uniform 3 per cent raise every year. The current norm is a Rs 500-increase in the basic pay annually within the grade scale.

But what would be music to the bureaucrats? ears is that the PM has shot down Finance Minister P Chidambaram?s suggestion that the new wage be effective from January 2007 instead of January 2006 because of the heavy run on this year?s Budget. Chidambaram had also wanted that the past dues be parked in the General Provident Fund to be provided as pension after retirement of the employees so that this year?s outgo from the Budget would be limited to Rs 12,500 crore.

But the PM would have none of that. He has ensured that the new pay would be effective from January 2006, as recommended by the Commission, with 40 per cent of the arrears paid in the current fiscal and the remaining 60 per cent next year.

The actual pay-out would come in November after the monsoon session of Parliament in September passes the Finance Ministry?s supplementary Demand For Grant to fund the wage bill, said sources.

What has also been shot down, though by the Committee of Secretaries, is the inclusion of heads of other services in the rank of Cabinet Secretary. The CS will remain primus inter pares, the first among equals, and that position would not be granted to the head of Intelligence Bureau, the three service chiefs or the Chairman Railway Board?as had been demanded.

There would also be no scrapping of Group D personnel (peons in ministries and coolies in Indian Railways). The Commission had suggested that these posts be subsumed in Group C of clerks, fresh induction be stopped and jobs be outsourced.

As for the armed forces, the good news is that military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month. The forces had demanded Rs 3,000 as against Rs 1,000 introduced by the commission.

There would also be a significant improvement in the salaries of Brigadiers as the government has agreed to put them in Pay Band 4 (Rs 39,200-67,000) as against the suggested pay band 3 (Rs 15,600 - 39,100).

For the Indian Police Service and Indian Forest Service, relief would come in the form of abolition of the Deputy Inspector General scale. There would also be no discrimination between Group B and Group A service officers in the form of a differential basic pay at the time of joining, as suggested by the Commission. They would both start at the same scale, as is prevalent now, said sources.


A 20 % raise over the pay bands suggested by the Commission

Uniform 3% raise in basic pay every year. The norm is a Rs 500-increase annually within grade scale

New wages to be effective from January 2006

No Cabinet Secretary rank for Intelligence Bureau chief, the three Service chiefs or the Chairman, Railway Board

Group D personnel to stay (peons in ministries and porters in Railways)

Military service pay for persons below the officer rank (POBR) would be Rs 2,000 per month

Significant hike in salaries of Brigadiers: they move to Pay Band 4 (Rs 39,200-67,000) from the suggested Pay Band 3 (Rs 15,600-39,100)

DIG-scale abolished in IPS and Indian Forest Service

Source Link: Indian Express

Cabinet okays pay panel report, 21% is the average hike

Diwali?s come early for Central Government employees, who total 50 lakh in all. On Thursday, the Centre announced that it would raise salaries of all its employees by an average of 21 per cent.

The seal of approval on the Sixth Pay Commission recommendations came with some improvements suggested by a committee of secretaries.

New salaries will be paid from September, package at lowest level to exceed Rs 10,000.Now, the junior-most Central employee will be paid at least Rs 10,000 per month, said Expenditure Secretary Sushma Nath. The senior-most employee would get at least Rs 1 lakh.

The decision was timed ahead of Prime Minister Manmohan Singh?s term?s last Independence Day address to the nation from the ramparts of Red Fort on Friday. The pay panel, headed by Justice Srikrishna, had submitted its report in March 2008.

Singh played a key role in ensuring that the demands put forth by the employees, civilian and defence personnel were not rejected on the grounds of financial constraints.

The pay hikes will, in all, cost the exchequer an extra Rs 5,237 crore this year.

While the Armed Forces Headquarters Association cheered the announcement, Indian Police Service (IPS) officers were glum as none of their major demands were met, including risk allowance for constables. ?Justice has not been done? It is for society to think what kind of police force it wants? Who will join this service?? a member of the IPS Association said in Delhi.

The notification, expected in a fortnight, will cover pensioners as well.

The salary hikes are with retrospective effect from January 2006, while the allowances will be effective from September 1. Forty per cent of the Rs 29,373 crore arrears will be received this financial year, while the rest will come in the next fiscal.

The pay hike would cost the Centre Rs 17,798 crore annually, pushing its wage bill to Rs 87,000 crore.

The huge inflow of disposable income in the hands of government employees ? that will come ahead of Diwali ? could further push up prices. Inflation, according to data released on Thursday, was at a 13-year high of 12.44 per cent.

The pay commission had been constituted under pressure from the Left in 2006. Now, pressure has already started building on state governments for a similar hike.

Two years ago, Gujarat and Madhya Pradesh had advised the government against constituting the commission, saying they could not afford the hike. On Thursday, the Bharatiya Janata Party said the hikes were a move to net votes.

Three states, including Delhi, go to the polls in a few months. The Lok Sabha elections are expected early next year.

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