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.
