Yet Another Referal to Central Pay Commission
On Non-Functional Upgradation for Armed Forces
Governments Never Learn. Only People Learn
-Abraham Lincoln
The Context
An inter-ministerial Committee arrived at the following conclusion in January 2026,
“9.1. After conducting the fresh and exhaustive review of the case for grant of Non Functional Upgradation (NFU) to Armed Forces Personnel and taking into account the above deliberations, the Committee arrived at the conclusion that the justification provided does not support the grant of Non Functional Upgradation to the Armed Forces. Further, the complexities in implementation, possible legal complications and significantly large financial implications also do not favour such decision. Accordingly, the Committee unanimously recommends that Non Functional Upgradation may not be extended to the Armed Forces” (italics supplied).
The Committee had Financial Adviser (Defence Services), as Chairman, with Joint Secretary (Army & TA), Dept of Military Affairs, Director, Dept of P & T and Joint Secretary, Dept of Exp, MoF as Members.
Based on the above Committee’s report, the Pay & Salary Cell of the Pay/Services Division of the Department of Military Affairs, MoD has filed and submitted an additional affidavit in the honourable Supreme Court stating, inter alia, “5. The issue of Non Functional Upgradation may also be referred to 8th Central Pay Commission which is the expert body set up for pay related matters and can examine the matter holistically “ (italics supplied).
It may not be out of place to mention that the NFU matter has already been referred to 7th CPC vide MoD ID No. 22(4)/2012-D (Pay/Services) dated 25th August 2014. The Empowered Committee of Secretaries (ECoS) to implement recommendations of the 7th CPC decided and recommended that the administrative Ministry must take a decision on NFU (Para 12.1 of Notes for Empowered Committee of Secretaries (ECoS) on page 39 of 75/Page 16 of 37 F No. 1-2/2016-IC of the Minutes dated 22 June 2016 (emphasis supplied).
The subsequent paragraphs present a chronology of High Powered Committee Reports and holistic consideration of the successive Central Pay Commissions that have resulted in (a) No decision by the Government or (b) Courts over turning of decisions of the Ministries based on reports of High Powered Committees. Information cited below has been obtained through applications, First Appeals and Second Appeals under the RTI Act, 2005 or from Govt sources in the public domain such as the National Digital Library.
Special Disturbance Allowance, Rank Pay and Military Service Pay
Reports have appeared in the media that Officers of the Armed Forces are paid Military Service Pay (MSP) whilst Civilian employees are not. Therefore, MSP should disqualify them from being entitled to NFU. This opinion/view disregards the fact that successive Central Pay Commissions have recommended the MSP and its previous avatars but the implementation by financial authorities have driven Armed Forces personnel to successfully challenge in the honourable Courts.
Special Disturbance Allowance
Special Disturbance Allowance was granted in 1950 for officers up to and including the rank of Brigadiers “…to compensate for turbulence in service life. It was increased in the year 1970 as a measure of immediate relief to Service officers… (Para 11, Chapter 50 of the Third CPC Report)
In para 13, the 3rd CPC continues…”13. We have tried to ascertain the circumstances in which this allowance came to be granted and find that it was part of several concession granted in the year 1950 as a temporary measure to improve the earnings of Service officers without interfering with the pay scales introduced on the recommendations of the Post War Pay Committee. At that time many of the ICOs were brought down from their war-time scales of pay to the new scales and the grant of this concession among others helped to afford some relief to these officers. It is therefore evident that Service officers were undergoing financial hardships that the Govt of the day decided on ameliorating “(emphasis supplied)
The 3rd CPC concluded, on the subject of SDA, “18…We would, however, hesitate to recommend total abolition of this longstanding allowance as it may result in an immediate loss of emoluments. We have accordingly recommended a higher starting salary for Commissioned Officers as compared to officers of the Civilian Class I Service and have also taken the existing rate of the allowance into account in fixing the new scales” (italics and emphasis supplied).
Rank Pay and High Powered Committee Report
The 4th CPC stated at Para 28.12, inter alia, “We also recommend that the pay structure should be such that it makes Armed Forces attractive as a career and provides reasonable pay progression to the officers of the Services”….and at
“28.13. We also recommend that, in addition to the pay in the above integrated scale, the following rank pays may be given to officers in the Army and their equivalents in the other Services….” (italics and emphasis supplied).
However, the Controller of Defence Accounts (CDA), without consulting either the DoP&T or Dept of Expenditure, decided that Rank Pay would be deducted from the new pay of 4th CPC derived from the CPC proposed formula. The deduction would then be added to the reduced amount of pay. This questionable formula was because the sum of Basic Pay in the integrated pay scale plus Rank Pay would place the emoluments of Service officers higher than the emoluments of equivalent Class 1 Officers
This was questioned by Dept of Expenditure when the question of implementing in the numerous notes in MoD file No. B/25511/AKDP/AG/PQ-3(a). The notings also reveals the bureaucratic convolutions including going over the head of then Addl Solicitor General Shri (later Justice) Nageshwar Rao through another ASG with a Special Leave to Appeal to the honourable Supreme Court in 2005 contesting the orders of Division Bench of the honourable High Court of Kerala in Maj A K Dhanapalan vs UoI in July 2003. The honourable Supreme Court promptly dismissed the Special Leave to Appeal. (Notes 88 to 120 in MoD file No. B/25511/AKDP/AG/PQ-3(a) supplied vide No. 35(1)/2013-D (Pay/Services) dated 12 May 2015).
High Powered Committee on Rank Pay and the Judicial Result
When thousands of similarly situated officers and pensioners approached the MoD in 2007, they were compelled to approach various honourable High Courts. Their appeals were transferred to the honourable Supreme Court (TP (C) 56 of 2007. In March 2010, the honourable Supreme Court upheld the order of the Division bench of the High Court of Kerala.
Pay/Services Division, MoD moved the then Solicitor General in 2010 stating that implementing the orders of the honourable Court would result in immense financial implications and work to revise the emoluments of a large number of officers. The SG advised constituting a High Powered Committee to examine the implications.
The High Powered Committee was constituted vide F No. 34(1)/2006-D (Pay/Services dated 05 Apr 2010 and comprised then Defence Secretary as Chairman, then Secretary, Dept of Expenditure, MoF and then Secretary, Defence (Finance), MoD as Members.
Further, an additional affidavit dated 10 Nov 2010 filed by MoD (Pay/Services) relied on the report to state (déjà vu) that implementing of the order of the honourable Supreme Court (IA No. 9 of 2010 in TP (C) 56 of 2007) for similarly situated officers “would create immense implementation complexities, legal complications, and significantly large financial implications” (Para 29 (b) of Addl Affidavit citing Paras 9 and 10 of High Powered Committee Report).
NNeedless to add, on 03 Sep 2012, the 3 Judge Bench of Justice R M Lodha (later CJI), Justice T S Thakur (later CJI) and Justice A R Dave, in IA No. 9 of 2010 in TP (C) 56 of 2007, upheld the judgement of 08 Mar 2010 of the Court in TP (C) 56 of 2007 but reduced the aspect of 6% arrears from 1986.
Before the above matter gained publicity in the public domain, the honourable High Court of Delhi had granted, in 1990, one Air Vice Marshal S N Chaturvedi the same amount of emoluments as drawn by Air Commodores (a subordinate rank to Air Vice Marshal) who were earning higher Rs 5100 plus Rank Pay of Rs 1200 (Total Res 6300/) than him who was paid Rs 5900/-.
CCGDA estimated (in its findings communicated to the ibid High Powered Committee) that implementing the order of the honourable Supreme Court of 08 Mar 2010 would benefit approximately 46480 officers. However, final implementation was being stalled till the both the then Solicitor General (later Justice R F Nariman) on 17 Oct 2012 and then Attorney General for India Goolam Vahanvati (since deceased) opined that the Govt must implement the awards concerning Rank Pay (for the 4th and 5th CPC), especially the AG stating that “the Officers covered by 5th and 6th Pay Commissions cannot be expected to approach courts for orders in the same terms” vide AG Dy No. 325/AG/OPIN dated 18 Aug 2013 (italics supplied).
Denial of Military Service Pay resulting in lower emoluments for higher rank officers
6th CPC
The CPC replaced the nomenclature of Rank Pay with Military Service Pay (MSP) but granted Rs 6000 per month as MSP only upto the rank of Brigadier (Chapter 2.3 of Report). The CPC denied MSP to higher ranks with a bland statement, “Higher grades do not need to be extended any MSP” (Para 2.3.12).
However, the CPC could not/did not take a holistic view that at the top of the scale of PB-4, Brigadiers would draw Rs 67000 + Grade Pay Rs 8900 + MSP 6000 = Rs 81900 whereas the Maj Gens would draw Rs 67000 + Grade Pay Rs 10000 + Nil MSP = Rs 77000, and the Lt Gens would draw Rs 67000 + Grade Pay 12000 + Nil MSP = Rs 79000.
The much touted expertise of the CPC with an IDAS officer of the equivalent grade of Joint Secretary in its Secretariat, did not consider that higher grade (rank) officers must be paid at least the same amount as officers in a junior grade/rank because “the issue of anomaly relating to senior Government employees drawing less pay than their juniors due to application of provisions of FR 22{I)(a)(1) is considered on merits for allowing stepping up pay of the seniors so as to bring it at par with that of the junior in accordance with the guidelines in DoE’s OM No. F.2(78)-E.III(A)63 dated, 02.2.1966, DoP&T OM No. 4/7/92-Estt (Pay-I) dated 04 Nov 1993.”
Based on the 6th CPC recommendations MoD (Pay/Services) prepared a draft Special Army Instruction No. 2/S/2008. While vetting the draft SAI (on MoD F No. 1 (43)/2008/D (P/S), the Director (IC), Deptt of Expenditure, MoF observed, at Note 10, inter alia, that “MoD may take a view whether the maximum reached in PB-4 needs to include MSP as well, otherwise, at the maximum of the Pay Band Colonels and Brigadiers would draw more pay/pension than Lt Generals and Army Commanders in future i.e. a pay of Rs 67000 plus Grade Pay 8700 plus MSP 6000 equal to Rs 81700 in case of Colonels and Rs 67000 + 8900 +6000 = 81900 in case of Brigadiers.
However Dy CGDA (AT) vide UO No. AT/1/1496-II dated 20.10.2008 dismissed such a possibility stating, inter alia, that in all probability they are likely to be promoted to higher rank or retire on attaining the age of superannuation.
Subsequently, In replies to CGDFA/R/2017/50280, various Pay and Pension authorities such as PCDA (O), Pune vide LW/SS/AT/RTI/45/Vol-V dated 29.8.2017, PCDA (N) vide AN/I/LC/RTI/Corr/Vol-XXIV dated 25.09.2017, and AFCAO vide Air HQ/23401/204/4/12206/E/PS dated 20.09.2017 have confirmed that several hundred non-AMC/ADC/RVC officers are indeed drawing more pay and pension as on 31.12.2015 compared even to Lt Gens and Army Commanders & equivalents.
The matter was not referred to or considered by a Group of Ministers (GoM) in December 2008.
7th CPC
The CPC recommended MSP of Rs 5200 for Other Ranks, Rs 10800 for officers of the Military Nursing Service and Rs 15500 for Commissioned Officers up to and including the rank of Brigadier & equivalents. The officers assisting the 7th CPC appear to have prevented a holistic view by not placing DoE’s OM No. F.2(78)-E.III(A)63 dated, 02.2.1966, DoP&T OM No. 4/7/92-Estt (Pay-I) dated 04 Nov 1993 before them.
Note: Both CPCs had Indian Defence Accounts Service (IDAS) officers in their respective Secretariats.
It also makes one wonder why the two CPCs attributed different reasons for not granting MSP for Maj Gen and above. 7th CPC held that Maj Gen and above, by serving 2 or more years would draw higher gross sum in service compared to their subordinates who retire earlier. The ‘holistic view’ did not take into consideration that Brigadiers would draw higher pension (Rs 116550 per month) for a longer duration than those Maj Gen who retire 2 years or Lt Gen who retire 4 years later (page 130 of 7th CPC Report).
Judicial Resolution
This anomaly was admitted by UoI in an affidavit dated 21.12.2021 submitted to the honourable High Court of Punjab & Haryana in CWP No. 13425 of 2021 in Maj Gen D N Asija and Others vs UoI.
The indignity of higher ranked officers drawing lesser emoluments was finally redressed by the honourable High Court of Punjab & Haryana by its judgment of 03 Jul 2024 in CWP No. 36589 0f 2019 (Maj Gen P S Sandhu & Others vs UoI & Others) and tagged petitions what 6th and 7th CPCs, with their holistic views were unable to or were prevented from knowing.
The honourable Court held,
“….3. The respondent in its reply dated 12.12.2022 has accepted that there is pay anomaly vis-à-vis officials of different ranks.
4. Mr Sahil Garg, Advocate, during the course of hearing produced communication dated 12.06.2023 disclosing that government has resolved pay anomaly qua Major General/equivalent vis-à-vis Brigadier/equivalent ……
5. Mr Navdeep Singh, Advocate, submits that respondent should resolve anomaly qua all the ranks as conceded in the reply to the petition.
6. Faced with this, Mr Sahil Garg, Advocate, assured the Court that Competent Authority in the light of aforesaid instructions dated 12.06.2023 case of officials of other ranks as soon as petitioners would make a representation.
7. In the wake of statement of both sides, the petition stands disposed of. It is made clear that respondent shall consider and adjudicate claim of the petitioners in the light of aforesaid instructions as well as reply dated 12.12.2022 filed before this Court.”
Till the order of the Court, Brigadiers were drawing a maximum pension of Rs 116550 (being 50% of Pay of Rs 217600 plus MSP of Rs 15500 = Rs 233100) in the 7th CPC regime. In light of the above order of the honourable Court, the maximum pensions of Maj Gens were increased from Rs 109110 to Rs 116550, of Lt Gen from 112050/112200 to Rs 116550 and of Army Cdr/VCOAS from Rs 112500 to Rs 116550 ( MoD letter No. 1(2)/2023/D (Pen/Pol) dated 04 Sep 24.
One Rank One Pension (OROP)
The debate of OROP commenced “……on the petition signed by Shri K. Sanjay Prabhu, r/o Bengaluru and others praying for grant of one rank one pension to the armed forces personnel. The petition was countersigned by Shri Rajeev Chandrasekhar, Member, Rajya Sabha.
2. The petition was admitted by Hon'ble Chairman, Rajya Sabha on 15th March, 2011 under the provisions of Chapter X of the Rules of Procedure and Conduct of Business in the Council of States. In accordance with Rule 145 of the said Rules, the petition was presented to the Council on 18th March, 2011 by the Member who had countersigned it, after which it stood referred to the Committee on Petitions for examination and report in terms of Rule 150 ibid” (italics supplied).
It has been erroneously stated before the Committee that OROP was in existence till 3rd CPC and that 3rd CPC abolished it. Factually, there was the principle of Standard Rate of Pension (SRP) for each rank irrespective of the emoluments drawn on the date of retirement/death. SRP was changed to the present 50% of the last emoluments drawn on date of retirement or death by the 4th CPC in 1987 when it recommended and the Govt accepted than pension of all Central Govt employees and Defence Forces as approved by the Govt of India for judges of the Supreme Court and High Courts (Chapter 5, Para 5.19 for Civilian Employees and Chapter 13.10 of 4th CPC Report).
The definition of OROP accepted by the Govt is ‘same amount of pension for same rank for same number of years of service.’ Sadly, though an Expert Committee headed by the CGDA examined the methodology of implementation, it did not mention that this formula cannot be implemented because of
(a) Existing Govt orders on calculation of pension (50% of the reckonable emoluments on the date of retirement or death),
(b) To pay the same amount to same rank with same years of service, the Govt has to either reduce the pension of some officers or increase the pension of other officers with same rank and same number of years of service.
Another aspect is that Officers of the Army, Navy and Air Force who are commissioned (if all are say at age 21 years) on the same date are promoted to Lt Col on completion of 13 years of Commissioned Service (say at age 34 years). Therefore, they would draw the same pay and, consequently, same pension if they were to retire on the same date. However, they continue to be in service till age of 52 years or 31 years or service.
However, Officers of various Corps in the Army, Branches in Navy and Branches in the Air Force are promoted to Col & equivalent ranks in different time frames.
Those promoted at the look by the First Promotion Board earn one or two increments more compared to those promoted in the Second or Third Promotion Boards. Hence the former will have a higher RE on the date of retirement. 50% of that would mean they have earned a higher pension than the latter who would have served lesser in the higher equivalent rank. Therefore, to have Same Rank, Same years of service and same amount of pension, the Govt will either have to penalise the former or increases the pension of latter.
Non-Functional (Financial) Upgradation
The latest additional affidavit based on the an Inter-Ministerial Committee’s findings on NFU mentioned yet another ‘recommendation to the next Central Pay Commission’. As the 129 page Report is not in the public domain, some aspects need to be considered.
Group of Ministers in December 2008 (No. 13787/EAM/2008 dated 19th December 2008)
Whilst the Officers (serving and retired) of Armed Forces were in the corridors of the honourable Supreme Court, the 6th CPC announced its recommendations. These caused so much anguish in the Armed Forces that it came to the attention of the honourable PM in 2008 who ordered a Group of Ministers (GoM), with Defence and Finance Minsters as members, to examine and resolve the issues. Then honourable External Affairs Minister (EAM), heading the GoM wrote the following in his report to the honourable PM: -
No. 13787/EAM/2008 19th December 2008
Sub: 6th Central Pay Commission (CPC) Implementation: Further benefits requested by the Armed Forces
This has reference to the meeting taken by you on 27 November 2008 to discuss the report I had sent on 11 November 2008. While there was general agreement on the recommendations made, Finance Minister raised the issue regarding the horizontal relativities of Armed Forces vis-à-vis CPMFs and civilians.
Vide PMO note dated 29.9.2008, I was requested to look into the issues raised by the Chairman, Chiefs of Staff Committee for further benefits subsequent to the decisions taken on the recommendations of the 6th CPC and give my recommendations in consultation with Defence Minister and Finance Minister.
As directed by you, I discussed the matter further with Shri A K Antony on 17 December. Since Shri P Chidambaram could not attend the meeting on 17 December, I sent him a note after my discussions with RM. I received his view this morning. The substantive portions of Shri Chidambaram’s view have been incorporated in the revised report which is enclosed. Following recommendations have been made in the revised report:
(i) The pensionary benefits to all PBORs may be given without disadvantage to any category and an Anomaly Committee may be set (up) immediately to address any such cases (emphasis supplied).
(ii) Lt Cols, who are in their parent service in combat or ready-to-combat jobs, may be placed in Pay Band-4. Those Lt Col level officers who are on deputation would be entitled to PB-4 only when they return to parent service.
: 2::
(iii) The grade pay for Lt Cols who are in their parent service in combat or ready to combat jobs, may be fixed at Rs 8000/- against the grade pay of Rs 8700/- for Cols/Directors. Those Lt Col level Officers who are on deputation be entitled to the above grade pay when they return to parent service.
(iv) A High-Powered Committee may be set up to resolve the issues relating to command and control functions/status of armed forces vis-à-vis paramilitary forces and civilians.
(v) The pay revision of the armed forces should be delinked from the civilian pay revisions. Separate Board or Commission should be set us to recommend the pay scales of the Armed Forces in future.
You may like to approve these recommendations for implementation.
Sd/------------------------------
Dr Manmohan Singh
Prime Minister of India
New Delhi
Copy to:
1. Shri A K Antony, Raksha Mantri, New Delhi
2. Shri P Chidambaram, Home Minister, New Delhi
Encl: [1B
Ministry of External Affairs
EAMO
Sub: 6th Central Pay Commission (CPC) Implementation: Further benefits requested
by the Armed Forces
Xxxx xxxx xxxx
3. The Central Pay Commissions (CPCs) are meant to suggest revision in pay for a broad category of government employees. The CPCs, by no stretch of imagination are meant to do the cadre management or improve the service prospects of individual service groups. The CPCs have somehow been turned into instruments for dealing with inter se cadre management problems by various services. The questions relating to inter se parity, seniority etc have to be dealt with by respective cadre controlling authorities (emphasis supplied).
4. All these problems of parity, disparity, comparison with status of the civilian services and ranks of the Police and Paramilitary forces have arisen after the Central Pay Commissions had been entrusted with the task of recommending pay scales of the Armed Forces also, which till the 3rd CPC recommended salary structures of civilian services only. In a democratic system such comparisons between Armed Forces and civilian services are undesirable. As is being done for the academicians, medical services, public sector units etc., in future a separate board or commission should recommend the pay scales of the Armed Forces thereby removing the root cause of the point-to-point comparisons between the ranks of Defence Services and Civilian Services which is not in the interest of the country (emphasis in the original Report)……...
Perhaps the above recommendation from the GoM is either not in the files with the DMA or has been ignored.
Cabinet Secretary Committee on issues related to Defence Service personnel and Ex-Servicemen - August 2012.
Vide orders dated 9th July, 2012 and 12th July, 2012, the Prime Minister constituted a Committee headed by the Cabinet Secretary and consisting of Principal Secretary to PM, Defence Secretary, Expenditure Secretary, Secretary (Personnel) and Secretary (Ex-Servicemen’s Welfare) with the purpose of looking into and providing suitable recommendations on the following issues of relevance to Defence Service personnel and ex-servicemen:-
(i) Issues relating to serving defence personnel and consisting of pay fixation anomalies related to Sixth Central Pay Commission:
(a) Common pay scale for in-service JCOs/ORs
(b) Initial pay fixation of Lt. Colonel/Colonel and Brigadier/equivalent
(c) Review and enhancement of grade pay
(d) Placing of all Lt Generals in HAG+ scale
(e) Grant of non-functional upgradation (NFU) to armed forces personnel (emphasis supplied)
xxxx xxxx xxxx
Grant of non-functional upgradation (NFU) to armed forces personnel
33. It has been brought out by the Defence Services that NFU is based on the recommendation of the Sixth CPC to provide an opportunity to all Organised Group ‘A’ Services to reach higher scales of pay two years after the same is granted to IAS officers at the centre. It has been strongly recommended that Non Functional Upgradation be extended to Armed Forces Officers.
34. The Committee noted that the service conditions of Defence Forces are quite different from those of civilian employees. Benefits in the form of Military Service Pay and various allowances are also available to the Defence Forces officers which are not admissible to civilian officers. It is, therefore, not logical to compare the earnings of the two Services. Further, Defence Forces officers are covered by a separate time bound promotion scheme upto the level of Colonel. The scheme of non-functional upgradation is applicable only for organised Group ‘A’ Services and was extended to IPS/IFS. The requirements related to command and control, the norms for recruitment, promotion and the rank structure of the Defence Forces are not identical to those of Group ‘A’ cadres. The average age of entry of Commissioned Officers is lower than that of those joining the Group A’ Services. No parity presently exists in the career progression of Group A’ Services and Commissioned Officers. In the circumstances, the Committee is unable to make a recommendation on the issue (emphasis supplied).
35. To sum up, the following recommendations are made by the Committee:-
xxxx xxxx xxxx
Issues relating to serving defence personnel
39. The Committee deliberated at length on the pay related issues raised by the Defence Forces. It was noted that the pay related issues are complex and have ramifications across the Government, including on para-military personnel. The proposals made by the Defence Forces in many cases are at variance with some of the principles followed by the Sixth Pay Commission. Some of the proposals have already been considered subsequent to the Sixth Pay Commission.
40. In this context, the Committee also noted that the next Pay Commission’s recommendations would be likely to be implemented w.e.f. 1.1.2016. If the Thirteenth Finance Commission’s recommendation that structural shocks such as arrears arising out of Pay Commission awards should be avoided by making the pay award commence from the date it is accepted is implemented, the next Pay Commission would need to be set up in the second half of 2013 or in early 2014.
41. In the circumstances, the Committee recommends that the pay related issues may be specifically referred to the next Pay Commission for its consideration as the Pay Commission is the expert body set up for this purpose which can examine these issues in a holistic manner (italics and emphasis supplied).
Extracts from Cabinet Secretary Committee Report 2012
CABINET SECRETARIAT
RASHTRAPATI BHAWAN
Subject: Decision on the recommendations of Cabinet Secretary
Committee on pay related issues of Defence Service Personnel
Reference is invited to M/o Defence O.M. No. 22 (4)/2012 – D (Pay/Services) dated 4th July, 2014 (addressed to PMO, Cabinet Secretariat, and D/o Expenditure) conveying the decision of the Government to accept the recommendations made by the subject mentioned Committee in respect of serving defence personnel.
2. In this connection, reference is also invited to this Secretariat’s Order of even number dated 13th July, 2012 constituting a Committee under the chairmanship of Cabinet Secretary and Principal Secretary to PM, Defence Secretary, and Secretaries of D/o Expenditure, D/0 Ex-Servicemen’s Welfare and Secretary, D/o Personnel & Training as members to look into pay and pension related issues of relevance to defence services personnel and Ex-servicemen.
3. D/0 Expenditure is requested to take further follow up action in the matter, under intimation to this Secretariat.
Sd/-----------
(S. Ahlladini Panda)
Director
Tel: 23792357
D/o Expenditure (Shri Ratan P. Watal, Secretary)
Cabinet Secretariat’s I.D. No. 213/2/3/2012-CA.IV dated 25th July, 2014
Copy for information to:
1. Shri Munu Mahavar, Director, PMO
2. Shri R. K.Mathur, Defence Secretary w.r.t. reference cited
Most Immediate
Government of India
Ministry of Defence
Subject: Decision on the recommendations of Cabinet Secretary Committee on pay related issues of Defence Services Personnel
On the directions of the Hon’ble Prime Minister, a Committee under the chairmanship of the Cabinet Secretary to look into certain pay and pension issues of serving and retired Defence Services Personnel was set up by the Cabinet Secretariat in July 2012. The Committee was serviced by D/o Expenditure. The issues placed before the Committee were as under: -
4. Defence Services Personnel
5. Common pay scales for in-service JCOs/ORs
6. Initial pay fixation of Lt Col/Col and Brig/equivalent
(a) Review and enhancement of Grade Pay
(d) Placing of all Lt Gens in HAG+ scale, and
7. Grant of Non-Functional Upgradation (NFU) to Armed Forces personnel
(II) Ex-servicemen
8. One Rank One Pension
xxxxx
2. The Committee submitted its report in August 2012. A copy of the Report is enclosed herewith. All the recommendations of the Committee related to Ex- servicemen have been implemented by issue of eight Government letters on 17.1.2013.
3. Regarding the issues related to serving Defence Personnel, the Committee vide Para 39 of its Report noted that “the pay related issues are complex and have ramifications across the Government including on para-military personnel. The proposals made by Defence Forces in many cases are at variance with some principles followed by the Sixth Pay Commission.”
Further, vide Para 41 of its Report, the Committee recommended that
“In the circumstances, the Committee recommends that the pay related issues may be specifically referred to the next Pay Commission for its consideration as the Pay Commission is the expert body set up for this purpose which can examine these issues in a holistic manner.”
4. The Government has accepted the above recommendations of the Committee on pay related issues. Accordingly, the above five issues related to serving defence personnel are referred to 7th CPC for its consideration.
Sd/-------------------
25.08.14
(Pradeep Kumar)
Director (AG-I)
2301 4036
Secretary, 7th Central Pay Commission, Post Box No. 4599, Hauz Khas PO, New Delhi – 110 016
MoD ID No. 22(4)/2012-D (Pay/Services) dated 25th August 2014
Encl: as above
Copy to: -
1. Ministry of Finance (Deptt of Expenditure)
2. Cabinet Secretariat
Cabinet Secretary Committee Reports and Services Headquarters
Whether these reports were shared with the Services HQ?
Reply to Request for Information
Action at Services HQ – CSC 9 and CSC - 12
Received by Regd Post on 25 Jul 16
Tri-Service Pay Staff (TRIPAS)
Room No. 116, Kashmir House
Rajaji Marg, New Delhi – 110 011
C/7026/VIth CPC/14 11 Jul 16
1. Please refer to your letter No. SYS/RTI/CSC-9 & 12/Services HQ dated 26 May 2016 and this office letter of even reference dated 16 Jun 16.
2. The desired information as asked vide your ibid letter is enumerated below: -
(a) Committee of Secretary (sic) Report of 2009 was not received by this office (emphasis supplied).
(b) Committee of Secretary (sic) Report of 2012 was promulgated on 17 Aug 2012. However, the report was forwarded to this office vide MoD ID No. 22 (4)/2012-D (Pay/Services) dated 04 Jul 2014 (copy of MoD covering note only is placed at enclosure 1) (emphasis supplied).
3. Meanwhile as no Anomalies Committee was formed by the Govt (except for the Committee of Secretary (sic) for resolution of pension related issues), each anomaly was taken up on case to case basis with Govt. A total of 46 anomalies (less 16 pension related anomalies) were pursued with the MoD…..
Xxxx xxxx xxxx
4. As most of these anomalies remained unresolved till mid 2014, MoD suggested that the issue be taken up by 7th CPC which has already been constituted by then. However Services felt that till the time MoD and MoF do not refer the issues to 7th CPC, no cognisance would be taken of the anomalies. Further correspondence on the issues are appended below: -
(a) AFPCC letter Air HQ/99140/03/AFPCC dated 15 Jul 14 to MoD for confirming that MoD has referred the issues to 7th CPC and requesting for MoD communication to 7th CPC.
(b) MoD replied vide No. 22(4)/2012/D (Pay/Services) dated 22 Jul 14 asking TRIPAS to take further necessary action on the matter.
(c) AFPCC letter No. Air HQ/99140/03/AFPCC dated 05 Aug 14 to MoD for undertaking the matter with Department of Expenditure/MoF.
(d) MoD vide note No. 22(4)/2012-D(Pay/Services) dated 25 Aug 14 stated that the five Core Anomalies are referred to 7th CPC.
(e) Based on a query raised by Army Pay Commission Cell on the status of core anomalies, the MoD once again stated vide No. 22(4)/2012-D (Pay/Services) dated 03 Sep 14 that the five Core Anomalies have already been referred to the 7th CPC vide their note quoted at para 4 (d) above.
5. The issue of Core Anomalies were also discussed on various occasions during TRIPAS/PARC meetings. A copy of the relevant minutes of the meetings are enclosed herewith: -
(a) Minutes of the meeting 45/2014 dated 27 Oct 14, Para 2, Item I refers
(b) Minutes of the meeting 05/2015 dated 02 Mar 15, Para 2, Item III refers
(c) Minutes of the meeting 11/2015 dated 08 Jul 15, Para 2, Item II refers
(d) Minutes of the meeting 18/2015 dated 26 Nov 15, Para 4 (a) refers
6. This is for your information.
Sd/--------------
(Kamal Hira)
Wg Cdr
Joint Director TRIPAS & CPIO
7th Central Pay Commission and Non Functional Financial Upgrade (NFU)
Shri Vivek Rae, Member and Shri Rathin Roy, Member, have favoured abolition of NFU at SAG and HAG level (para 7.2.24).
Regarding NFU for the Armed Forces, then Chairman, CoSC and CAS wrote to then RM (now late Shri Manohar Parikkar) vide C/7026/VII CPC/TRIPAS dated 08 Sep 16 as follows: -
8. Govt has already deferred the decision on grant of NFU to all cadres in the 7th CPC. Thus Defence Forces have sought only the notional grant of NFU in the 6th CPC regime for the purpose of fixation in 7th CPC regime; no arrears are being sought.
9. The proposal for grant of NFU in 6th CPC regime has now become even more critical due to the following: -
(a) Vide Para 2 of Annexure II to Govt of India notification for Civilians of 25 Jul 16, it is stipulated that ‘Pay Matrix comprising two dimensions have horizontal range in which each level corresponds to a functional role in the hierarchy.
(b) However, the pay fixation of Civilians is being done in the 7th CPC Civilian Pay Matrix not as per functional role in hierarchy but on NFU basis, a clear violation of the Govt Gazette notification. For example, the pay of a Supdt Engineer (MES) which has a functional grade pay of Rs 8700 per month has been fixed in Level 14 (Grade Pay Rs 10000/-) based on NFU…. A copy of the pay slip issued by JS (E)/CAO, MoD is annexed as Appendix A”(Annexure 5 to 8, Pages 102 of 119 of the Minutes of the 7th meeting of the Empowered Committee of Secretaries held on 03 Jan 17.
Empowered Committee of Secretaries post 7th CPC
However, the Dept of Expenditure Note for the Empowered Committee of Secretaries vide F No. 1/2/2016-IC dated 22 Jun 16 states, inter alia,
12. Department specific issues
12.1. Certain issues which relate to specific department/cadre/post or cadre restructuring, fall under the purview of administrative Ministries/Departments as per Allocation of Business Rules/Transaction of Business Rules. These also include inter-service/cadre related issues such as Non Functional Upgradation (NFU) presently available to 49 Organised Group ‘A’ services, 2 years edge to AIS officers vis-à-vis Organised Group ‘A’ services…. where the Commission has not arrived at a consensus. All these issues require careful consideration by respective Ministries/Departments as per prescribed procedure. ECoS was of the view that such issues may be separately examined by the concerned Ministries/Departments in consultation with the Department of Expenditure and/or Department of Personnel and Training, as the case may be as per Transaction of Business Rules/Allocation of Business Rules” (emphasis supplied).
Epilogue
Elsewhere it is stated that Armed Forces Officers should not be entitled to NFU because they are drawing Military Service Pay (MSP) and One Rank One Pension (OROP). The Govt of India approved MSP based on the recommendations of the 6th Central Pay Commission (CPC) and continued it in the 7th CPC. The lengthy reasons for MSP and its exclusive application to Armed Forces is available in the reports of the 6th (Chapter 2.3.12 to 14) and 7th CPC (5.2.22 and 6.1.28 to 30) especially
6.1.31 The Commission, after careful consideration of the matter, notes that there are exclusive elements that distinguish the Defence forces personnel from all other government employees. The intangible aspects linked to the special conditions of service experienced by them set them apart from civilian employees. Defence forces personnel are expected to conduct full spectrum operations in operational environments which are characterised by extreme complexity and may include force projection outside India’s territorial boundaries. Defence forces personnel are trained for war like situations with highly sophisticated war machinery. They have to keep themselves posted in modern warfare. The military institutions are a key symbol of national pride. Further, the superannuation of defence personnel, particularly Other Ranks (ORs) at a younger age, is also a factor that has been considered. The Commission has therefore taken a conscious decision that the Military Service Pay, which is a compensation for the various aspects described above and for the edge historically enjoyed by the Defence Forces over the civilian scales, will be admissible to the Defence Forces personnel only.”
MSP and its predecessors Special Disturbance Allowance (3rd CPC), Rank Pay (4th and 5th CPC) was decided by Central Pay Commissions which the honourable Supreme Court has held, “any complex exercise of job evaluation which is the remit of an expert body like a Pay Commission” (in Writ Petition (Civil) 648 of 2002 in Ramesh Singh Vs UoI)
However, there is no mention in any public debate about Special Duty Allowance of 10% of Basic Pay for Central Government employees serving in the North Eastern Region and Ladakh. Civilian employees paid from the Defence Services estimates and Railway employees too would be entitled (MoF/DoE No. 11/1/2017-E.II (B) dated 18 Jul 17). The junior most civilian officer (Level 10) drawing a Basic Pay of Rs 56000 will be paid a SDA of Rs 5600, whereas a SAG officer with Basic Pay of Rs 2, 17, 600 will draw Rs 21, 760 as SDA, whilst his equivalent Armed Forces officer is denied MSP!
It is evident that the Pay & Salary Cell of the Pay/Services Division of the Department of Military Affairs, Ministry of Defence is either unwilling to take a decision where in case it decides to grant the officers the NFU and resolves immense implementation complexities, legal complications, and significantly large financial implications or does not want to face the Armed Forces officers by categorically turning down them the benefit of NFU.
The Division of Pay/Services then under the Department of Defence, Ministry of Defence till formation of DMA in 2020 sent the issue of NFU to the 7th CPC in 2015 and the result is as stated by the ECoS. Pay & Salary Cell, now under the same Pay/Services Division but now under DMA and Secretary, DMA does a reprise of sending it to the 8th CPC.
E & O E
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