Pay Commission Updates

Oct, 24, 2016

IPS forum demands pay parity with IAS cadre

  1. Event:  Annual general body meeting of the Indian Police Service (Central) Association
  2. Issue: The association highlighted the issue of the delay in granting the IPS officers the pay and promotion parity with their IAS counterparts, as recommended by the Seventh Pay Commission
  3. According to the association, the proposal has been endorsed by the Ministry of Home Affairs, the cadre-controlling authority
  4. It said that the proposal was pending with the Department of Personnel
Oct, 04, 2016

Centre accepts pay panel recommendation on promotion

  1. News: Centre has accepted the recommendation of the 7th Pay Commission on Modified Assured Career Progression (MACP)
  2. MACP: For Central employees, would ensure one minimum promotion for every 10 years till 30 years of service
  3. Background: MACP was originally introduced in 2008 following the recommendations of the Sixth Pay Commission
Sep, 12, 2016

Armed forces want pay woes redressed

  1. News: After the protest by veterans over OROP, Govt is now facing the ire of the services over the implementation of the Seventh Pay Commission’s (7PC) recommendations
  2. The 3 services have requested that the implementation of the 7PC recommendations for the armed forces be withheld till key issues are addressed
  3. Issues: Non-Functional Upgrade (NFU), NFU pay fixation, Military Service Pay, common pay matrix for civilian and military services and allowances
  4. Discuss: It is contended that the implementation of OROP for the armed forces would create a severe strain on Govt finances. Explain the principles underlying OROP and arguments that have been cited in its support as well as opposition
Aug, 08, 2016

Centre forms panel to study enhanced allowance for retired employees

  1. News: The Union government has constituted a high-level committee to examine enhancement of Constant Daily Allowance (CDA)
  2. Context: The decision is a follow-up to the recommendations of the 7th Central Pay Commission
  3. 7th PC had also examined the principles which should govern the structure of pension and other retirement benefits
  4. CDA: Paid to retired employees with 100% disability only if disability is attributable to or aggravated during the course of service
Jul, 04, 2016

Government v/s private salaries

  1. An IIM-Ahmedabad study has found that lower-ranked Central government employees draw significantly higher salaries than those in the private sector
  2. Even qualified professionals working with the government at the entry level are paid more
  3. However, the skilled professionals (MD doctor) get higher salaries in private sector than the Central government employees
  4. In government jobs, the ratio of the top pay to the lowest pay are within a certain band (12-13:1)
  5. No such consideration applies in the private sector, which might have widened the inequalities
Jun, 30, 2016

4 Committees to examine employee concerns

  1. Context: The government has accepted the recommendations of the 7th Pay Commission
  2. To examine the concerns employees have raised 4 committees would be set up
  3. First will look into the implementation issues anticipated
  4. Second one will go into the likely anomalies
  5. Third will further examine the recommendations on allowances, which have largely been kept on hold
  6. Fourth will suggest measures for streamlining the National Pension System
Jun, 30, 2016

7th Pay Commission's recommendations accepted

  1. News: The government has accepted the recommendations of the 7th Pay Commission
  2. Hikes will be effective from August and will be paid with effect from January 1, 2016
  3. The arrears for the 6 months will be disbursed during the current financial year (2016-17) itself
  4. Impact: Salaries of Central government employees will increase; Pensioners too will receive more
  5. Overall increase of 23.5% for over 1 crore government employees and pensioners
  6. Compression ratio of 1:3.12 – pay of a Class I officer on direct recruitment will be thrice the pay of an entrant at the lowest level
Jun, 29, 2016

7th Pay Commission - over 23.5% pay hike likely

  1. News: Finance Ministry would soon propose a 23.55% overall increase in salaries and pensions for more than 1 crore government employees and pensioners
  2. The proposal is in line with the 7th Pay Commission’s recommendations
  3. Impact: Cost to the exchequer on this account is estimated at Rs 1.02 lakh crore, an additional outgo of 0.65% of the GDP
  4. Background: In November 2015, the pay panel had recommended increases of 16% in pay and 24% in pensions within the overall 23.55%
May, 04, 2016

Abolish overtime for Govt. staff, pay panel recommends

  1. Context: A committee of secretaries headed by Cabinet Secretary P. K. Sinha reviewing the Seventh Pay Commission’s (SPC) recommendations
  2. SPC has recommended that overtime allowance, except for operational staff and industrial employees governed by statutory provisions, should be abolished
  3. Why? Data showed that the expenditure under the head for the Railways and Defence ministries more than doubled in seven years ending 2012-13
  4. Recommendation: Govt offices need to increase productivity and efficiency there should be stricter control on the Centre’s expenditure under the overtime head
Feb, 06, 2016

Rs. 1.1 trillion additional provision for OROP, Pay hikes

  1. Additional financial burden on govt in 2016-17 will be Rs 1 trillion
  2. This is on account of 7th Pay Commission & OROP scheme
  3. Of this, Rs 73,650 crore will come from the general budget & Rs 28,450 crore from rail budget
  4. Even if spending is more, govt is confident about achieving FD target of 3.9% for 2015-16
Feb, 04, 2016

Merge DA with basic this year and defer increments: pay panel member

Pay and pension revision recommendations are scheduled to take effect from January 1.

  1. To meet fiscal deficit target, the Government should merge the basic pay and dearness allowance (DA) of central government employees in the current year.
  2. On other side, Defer implementing any real increases in pay and pensions.
  3. This could be done by compensating those who would have to bear the burden of the deferred effect by giving them a more generous award distributed over several years.
  4. The Government’s fiscal deficit in 2008-09, the year the Sixth Central Pay Commission award was implemented, doubled to 6 per cent.
  5. Currently, Central government pay and allowances account for 1 per cent of the country’s GDP.
Jan, 19, 2016

7th pay commission award to be delayed

  1. The delay in 7th pay commission award would allow to keep fiscal deficit close to the targeted 3.9% and 3.5% of GDP for this financial year and the next respectively.
  2. With a massive financial resource crunch estimated for 2016-17, the govt. is planning to defer the implementation of the 7th Pay Commission award.
  3. The aggregate Budget numbers would be impossible to sustain on the back of the current trend in growth of tax receipts.
  4. According to CAG, the tax receipts are just 50% of the Budget estimates after the first 8 months of the year.
  5. There is also sluggish pace of GDP growth and the almost negative deflator.
Nov, 26, 2015

Pay panel proposals widen civil-military gap

The 7th CPC has observed that the pay of defence service officers remains uninterruptedly higher for a 32-year period, and post which pay of defence and civil service officers are at par.

  1. However, several officers pointed that the officer cadre constitute only 3-4% of the 1.3 mn-strong Army.
  2. The allowances given to military personnel are 50 as against 90 to civilian officials.
  3. Disadvantage to Defence forces are due to absence of military members on the panel.
Nov, 21, 2015

Delicate balancing: A spending boost, but an inflationary aftershock likely

On the fiscal front, experts feel that a burden of Rs 73,000 crore in FY17 may not pose a major problem for the Centre.

  1. Market experts say, while on one hand it will provide a big stimulus to the economy in coming years.
  2. On the other hand, it would be inflationary in nature, thus calls for delicate balancing between growth and inflation.
  3. On the fiscal front, experts feel that a burden of Rs 73,000 crore in FY17 may not pose a major problem for the Centre.
  4. Analysts feel that it will lead to rise in consumption and will thus provide boost to the economy.
  5. Crisil pointed out, consumption get boost as states too have implemented wage hikes by a delay of one year and that by perking up household consumption demand.

CPC revisions will facilitate faster improvement in capacity utilisation in the fiscal 2017.

Nov, 20, 2015

Panel rejects demand on graded rates for military service pay

The pay panel has rejcted the demands on graded rates for military service pay, incentives for select ranks from Colonels to Lt Generals and inclusion of Lt Generals in higher income group.

  1. The commission accepted that the nature of duties of the armed forces is unique and calls for retention of MSP.
  2. To make Short Service Commission more attractive, the panel recommended that SSC officers be allowed to retire anytime between 7 to 10 years of service.
  3. Non-functional Upgradation should be extended to the officers of the defence forces and Central Armed Police Forces.
Nov, 19, 2015

Dissent in 7th pay panel over edge for IAS & IFS

  1. Seventh Pay Commission, chaired by Justice A.K. Mathur, will submit recommendations.
  2. For an average 15-16 per cent increase in pay, allowances and pensions for Central government employees.
  3. It is lower than the 20 per cent suggested by the 6th Pay Commission.
  4. Commission will submit a recommendation on an alternative approach to the one rank one pension for defence personnel.
  5. The cost of the recommendations, if accepted, works out to 0.6% of GDP in the 1st year of implementation.
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