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, in June, 2016, the Cabinet had
approved implementation of the recommendations with an additional
financial outgo of Rs 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 Rs.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 pensioners
The
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 Rs.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 Rs. 130 crore
per annum.
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AKT/VBA/SH
(Release ID :161508)
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