Pay panel report accepted, additional Rs 80 billion burden on govt

In a far-reaching decision that will substantially benefit Central government employees, the Cabinet on Friday decided to implement the Fifth Pay Commission recommendations in parts.

Accordingly, the pay scales and allowances will be raised. But the recommendations for raising the retirement age from 58 to 60, reversion to a six-day-week system and abolition of overtime have been rejected.

The decision will take retrospective effect from January 1, 1996, and would cost the exchequer an additional Rs 80 billion per annum. The arrears will be paid as recommended by the Commission, and employees will start getting the new scales within two months, a spokesman said.

The government has fixed a minimum family pension of Rs 1,220 per month as compared to the Rs 375 before. Further, the slab system of computation has been abolished. The new formula will apply to existing family pensioners also.

Another important recommendation granted is the change in the definition of family. Now, parents are also eligible for family pension.

A major beneficiary of the decision is the Indian Forest Service officers. They have been brought at par with their colleagues in the Indian Police Service in terms of designation and payscale.

In the case of armed forces personnel, the risk allowance for those based in Siachen and those working in submarines and fighter jets has been increased from Rs 3,000 to Rs 7,000 per month.

Brigadiers and their equivalents in the navy and air force will get a hike from Rs 16,700 to 18,050.

The existing ceiling of gratuity goes up from Rs 250,000 to Rs 350,000.

Government employees will now be entitled to a house rent allowance of 30 per cent of their basic salaries in A-one cities. In other cities, it will vary from 5 to 15 per cent.

Till now, the employees could accumulate 240 days's earned leave and encash it at the time of retirement. They will now be entitled to accumulate 300 days of earned leave.

However, the number of casual leaves has been reduced from 12 to 8 days.

The government rejected the Commission's recommendation to reduce the number of public holidays.

Earlier, employees were entitled to a house-building advance of a minimum of Rs 250,000 and a maximum of Rs 750,000. They are now eligible for a minimum of Rs 750,000 and maximum of Rs 18,00,000. The interest on the loan would be 12 per cent. Earlier, it varied from 6 to 11 per cent.

The government accepted the proposal that no holiday may be declared in the event of the death of a person other than the incumbent President or prime minister.

It accepted the recommendation relating to transport allowance with slight modifications. Those employees with government accommodation within one km from the place of work and those provided with government transport are not eligible for transport allowance anymore.

UNI