A Quick Take on 7th CPC Recommendations

A QUICK TAKE ON 7TH CPC RECOMMENDATIONS

Notes of caution:

A.      The subsequent comments are based on Recommendations of the 7^th CPC. It is possible, (probable?) that the GoI may accept some, all or modify some or all recommendations.   

B.      Incomplete picture due to the absence of the information on contents of the Joint Service Memorandum (JSM) submitted by Services HQ and the subsequent meetings that Army, Navy and Air Force Pay Commission Cells have had with the 7^th CPC, separately and jointly.

 

1.                  Minimum Pay. The minimum pay in government is recommended to be set at Rs 18000 per month (Chapter 5).

New Pay Structure for Defence Forces Personnel (Chapter 5.2 (page 86) to Chapter 6 (Page 95)

2.                  The present system of pay bands and grade pay has been dispensed with and a new pay matrix has been designed. The status of the employee, hitherto determined by grade pay, will now be determined by the level in the pay matrix. Separate pay matrices have been drawn up for Civilians, Defence Personnel and for Military Nursing Service. All existing levels have been subsumed in the new structure; no new levels have been introduced nor has any level been dispensed with.

3.                  In the “horizontal range” of the pay matrix level corresponds to a ‘functional role in the hierarchy’ and as the employee’s level rises, he or she moves to the next higher level. The” vertical range” i.e. Index for each level denotes ‘pay progression’ within that level and an employee would move vertically within each level as per the annual financial progression (increment) of three percent for every additional year of service rendered.

4.                  Fitment. The starting point for the first level of the matrix has been set at Rs 18,000. This corresponds to the present starting pay of Rs 7,000, which is the beginning of PB-1 viz., Rs 5200 + GP 1800, on the date of implementation of the VI CPC recommendations. Hence the starting point now proposed is 2.57 times of what was prevailing on 01.01.2006. This fitment factor of 2.57 is being proposed to be applied uniformly for all employees (para 5.1.27).

The starting point of a Sepoy (and equivalent), the entry level personnel in the defence forces, has been fixed in the Defence Pay Matrix at ₹21,700. The starting point in the existing pay structure is ₹8,460 for a Sepoy/equivalent (para 5.2.7).

5.                  Annual Increment. The rate of annual increment is being retained at 3 percent.

6.                  Entry Pay. The differential of entry pay between new recruits and promoted employees at various levels has been done away with.

Modified Assured Career Progression (MACP).

7.                  MACP will continue to be administered at 8, 16 and 24 years as before. In the new Pay matrix, the employees will move to the immediate next level in the hierarchy.

8.                  The Commission has proposed withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service. (paras 5.1.44-5.1.46)

9.                  Defence Pay matrix. A pay matrix similar to that for civilian employees has been drawn up for defence personnel. The commencement of the Defence Pay Matrix for combatants corresponds to the existing GP 2000, which is the induction level for Sepoys and equivalent. The Pay Matrix designed for the defence forces personnel is more compact than the civil pay matrix keeping in view the number of levels, age and retirement profile of the service personnel.

An ‘index of rationalisation’ has been applied while making enhancement of levels from Pay Band 1 to 2, 2 to 3 and 3 onwards on the premise that role, responsibility and accountability increases at each step in the hierarchy. At the existing PB-1, this index is 2.57, increasing to 2.62 for personnel in PB-2 and further to 2.67 from PB-3. Recognising the significantly higher degree of responsibility and accountability at levels corresponding to Senior Administrative Grade, the entry pay is recommended for enhancement by a multiple of 2.72. The same multiple is also being applied at the HAG and HAG+ levels. At the apex level the index applied is 2.81 and for the Service Chiefs/Cabinet Secretary the index has been fixed at 2.78 (para 5.2.8).

10.             Military Nursing Officers. Similarly, in the case of the pay matrix for (MNS), the existing uniqueness in the pay structure of MNS officers has been captured in the pay matrix designed for the MNS.

Military Service Pay

11.                The Defence Forces personnel will continue to be entitled to payment of Military Service Pay for all ranks up to and inclusive of Brigadiers and their equivalents. The MSP per month recommended is as follows:

(a)   Service Officers: - Rs 15,500

(b)   Nursing Officers: - Rs 10,800

(c)   JCO/Ors: - Rs  5,200

(d)   Non Combatants (Enrolled) in the Air Force: - Rs 3,600

12.              MSP will continue to be reckoned as Basic Pay for purposes of Dearness Allowance, as also in the computation of pension. Military Service Pay will however not be counted for purposes of House Rent Allowance, Composite Transfer Grant and Annual Increment.

13.              The Military Service Pay, which is a compensation for the various aspects e.g., intangibles linked to special conditions of service, conducting full spectrum operation including force projection outside India’s boundaries, superannuation at a younger age and for the edge historically enjoyed by the Defence Forces over the civilian scales, will be admissible to the Defence Forces personnel only.

14.              Rationalisation of Trades. All X trades should mandatorily obtain a qualification which is equivalent of a diploma in engineering (recognised by AICTE). The incentive structure will henceforth be linked with the qualifications as follows:

(a)   X pay for JCOs/ORs in Group X at Rs 3,600 per month for those currently in X pay, but not having a technical qualification recognised by AICTE.

(b)   X pay for JCOs/ORs in Group X at Rs 6,200 per month for all X trades which involve obtaining a qualification which is equivalent of a diploma recognised by AICTE.

15.              Defence Security Corps (DSC). The benefit of MACP be permitted to DSC personnel also. However this benefit should be limited to a total of three upgrades in the entire service career, taking the combined length of the regular employment and the course of reemployment as Defence Service Corps personnel. The first benefit of MACP may be extended to them after a period of eight years from their date of re-employment, in case they do not get a promotion during this period.

16.              Grant of Annual Increment to Recruits. The benefit of grant of first annual increment to recruits will be reckoned from date of enrolment.

17.              Short Service Commissioned Officers. Short Service Commissioned Officers will be allowed to exit Armed Forces any time between 7 and 10 years of service with a terminal gratuity equivalent of 10.5 months of reckonable emoluments. They will further be entitled to a fully funded one year Executive Programme or a M.Tech. programme at a premier Institute.

Allowances (Chapter 8)

15.              The entire structure of allowances have been examined de novo with the overall aim of transparency, simplification and rationalization, keeping amongst other things, the proposed pay structure in mind. The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Particular emphasis has been placed on simplifying the process of claiming allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.

16.               Most of the allowances that have been retained have been given a raise that is commensurate with the rise in DA. Allowances that are in the nature of a fixed amount but fully indexed to DA have not been given any raise. Regarding percentage based allowances, since the Basic Pay will rise as a result of the recommendations of this Commission, the quantum of percentage based allowances has been rationalized by a factor of 0.8.

17.              Risk and Hardship Allowance (RHA). Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance. This would be the ceiling for risk/hardship allowances and there would be no individual RHA with an amount higher than this allowance. The revised rates of the main allowances applicable to Air Force are as follows:-

RH- MAX Level>=9 Rs 31500pm Level>=8 Rs 21000pm Siachen Allce		HARDSHIP
		High	Allce	Medium	Allce	Low	Allce
Risk	High	R1H1 Level>=9 Rs 25000pm Level<=8 Rs 17300pm	Flying Allce, MARCOS and Chariot Allce, Special Forces Allce, Submarine Allce, COBRA Allce, High Altitude Allce- Cat -III	R1H2 Level>=9 Rs 16900pm Level<=8 Rs 9700pm	Highly Active Field Area Allce, CI Ops Allce in Field Areas	R1H3 Level>=9 Rs 5300pm Level<=8 Rs 4100pm	Hospital Patient Care Allce (HPCA), Patient Care Allce (PCA), Test Pilot and Flight Test Engineer Allce
	Medium	R2H1 Level>=9 Rs 16900pm Level<=8 Rs 9700pm	This cell that does not subsume any existing Allce	R2H2 Level>=9 Rs 10500pm Level<=8 Rs 6000pm	Field Area Allce, CI Ops Allce in Peace Areas, Sea Going Allce, Para Jump Instructor Allce, Free Fall Jump Instructor Allce, Para Allce	R2H3 Level>=9 Rs 3400pm Level<=8 Rs 2700pm	The cell does not subsume any of the Allces currently paid
	Low	R3H1 Level>=9 Rs 53000pm Level<=8 Rs 4100pm	High Altitude Allce-CAT II, Tough Location Allce-I, Boiler Watch Keeping Allce, Submarine Duty Allce (Submarine Duty Allce shall be payable on pro-rata basis)	R3H2 Level>=9 Rs 34000pm Level<=8 Rs 2700pm	High Altitude Allce-CAT I, Tough Location Allce-II, Project Allce, Compensatory (Construction or Survey) Allce, and Hydrographic Survey Allce (except non-surveyors) Track Maintainers-I, II, III and IV of Indian Railways should be granted a RHA based on the rates of this cell, in view of the hardship faced by these categories of employees	R3H3 Level>=9 Rs 1200pm Level<=8 Rs 1000pm	Tough Location Allce-III, Cooking Allce, Hardlying Money (Full Rate), Health and Malaria Allce, Special LC Gate Allce, Submarine Technical Allce, Hydrographic Survey Allce (for non-surveyors) Hardlying Money Allce (Half Rate) will be half the rate in this Cell. Submarine Technical Allce should be extended to Master Chief Artificier/Techanicians.

(a)   Tech Allowance

(i)     Tier I retained at Rs 3000 pm (no change in rate)

(ii)   Tier II abolished.

(b)   Clothing Allowance: Rs 20000 per annum for Officers and Rs 10000 for Other Ranks in lieu of KMA, OTK and free issue of clothing to men. However special clothing will not be affected.

House Rent Allowance

18.              In line with the Commission’s general policy of rationalizing the percentage based allowances by a factor of 0.8, HRA would be rationalized to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively. Currently, in the case of those drawing either NPA or MSP or both, the amounts of NPA/MSP is included with the Basic Pay and HRA is being paid as a percentage of the total amount. The Commission recommends that HRA should be calculated as a percentage of Basic Pay only and that add-ons like NPA, MSP, etc. should not be included while working out HRA.

19.              The Commission, in the interactions it has had with the men on the ground at all field locations it has visited, has seen first-hand that the lack of proper housing compensation is a source of discontentment among these employees. The service rendered by PBORs of uniformed services needs to be recognized and Housing provisions of PBORs of Defence, CAPFs and Indian Coast Guard have been simplified and HRA coverage has been extended to them.

20.             Uniform related allowances have been amalgamated under a simplified Dress Allowance payable annually. It has thus recommended that uniform related allowances be subsumed in a single Dress Allowance (including shoes).

21.              Entire CPMA will be payable to the PBORs of Defence Forces. Except Rum Allowance, other components of CPMA will be payable to PBORs of CAPFs, Indian Coast Guard, RPF and Police forces of Union Territories. Rum Allowance will be granted to PBORs of CAPFs and Indian Coast Guard as per the existing guidelines.

Pension & Related Benefits for Defence Forces Personnel (Chapter 10.2 from page 397 to page 420)

22.              The Commission recommends a revised pension formulation for civil Employees including CAPF personnel and Defence personnel, who have retired before 01.01.2016. This formulation will bring about complete parity of past pensioners with current retirees i.e OROP w.e.f 1.1.2016.

(a)    The first method of calculation of pension is as follows: -

(i)      All the personnel who retired prior to 01.01.2016 (expected date of implementation of the Seventh CPC recommendations) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix.

(ii)    This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he/she had earned in that level while in service, at the rate of three percent.

(iii)   Fifty percent of the total amount so arrived at shall be the revised pension. In the case of the Defence personnel, total amount so arrived at shall be inclusive of MSP.

(b)   The second calculation to be carried out is as follows: -

(i)      The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.

(c)    Pensioners may be given the option of choosing whichever formulation is beneficial to them.

23.             Since the fixation of pension as per formulation above may take a little time the Pay Commissions has recommended that in the first instance the revised pension may be calculated as at (b) above and the same may be paid as an interim measure. In the event calculation as per (a) above yields a higher amount the difference may be paid subsequently.

24.             The Commission recommends enhancement in the ceiling of gratuity from the existing Rs 10 lakh to Rs 20 lakh from 01.01.2016. The Commission further recommends, as has been done in the case of allowances that are partially indexed to Dearness Allowance, the ceiling on gratuity may increase by 25 percent whenever DA rises by 50 percent.

25.             Lump sum Compensation for Invalidation due to Disability. The Commission recommends an increase in the existing lump sum compensation from ₹9 lakh for 100 percent disability to Rs 20 lakh. However it finds no justification to recommend broad banding for payment of Ex-gratia award to service personnel boarded out on account of disability/war injury attributable to or aggravated by military service.

26.    The Commission notes that cadets are not considered on duty during training and therefore cannot be treated at par with serving defence forces personnel. The Commission, however, keeping in view the facts relating to cadets, recommends an increased ex-gratia disability award from the existing Rs 6,300 per month to Rs 16,200 per month for 100 percent disability.

27.    Disability Pension. The Commission keeping in view the tenets of equity, has recommended reverting to a slab base system for disability element, instead of existing percentile based disability pension regime. Distinct rates separately for officers, JCOs and ORs have been prescribed.

28.           Ex-gratia Lump sum Compensation to Next of Kin. The Commission has recommended the revision of rates of lump sum compensation for next of kin (NOK) in case of death arising in five separate circumstances, to be applied uniformly for the defence forces personnel and civilians.

Circumstances Proposed

(a)                        Death occurring due to accidents in course of performance of duties: Rs 25 lakh.

(b)                        Death in the course of performance of duties attribute to acts of violence by terrorists, anti-social elements etc: Rs 25 lakh

(c) Death occurring in border skirmishes and action against militants, terrorists, extremists, sea pirates: Rs 35 lakh

(d)                        Death occurring while on duty in the specified high altitude, inaccessible border posts, on account of natural disasters, extreme weather conditions: Rs 35 lakh

(e) Death occurring during enemy action in war or such war like engagements, which are specifically notified by Ministry of Defence and death occurring during evacuation of Indian Nationals from a war-torn zone in foreign country: Rs 45 lakh

29.    Non Functional Upgradation for Organised Group ‘A’ Services. The Chairman is of the considered opinion that since NFU has been in existence for the last ten years and is being availed by the entire organized Group `A’ Services it should be allowed to continue. The same will be available not only to all organized Central Group ‘A’ Services but also members of CAPFs, ICG and Defence forces. NFU will henceforth be based on the respective residency periods in the preceding substantive grade.

However, both members of the Commission are of the opinion that NFU must be abolished.

30.    Detailed reasoning, for organized Group ‘A’ Services and Defence Services has been given in Chapter 7.3.18 (page 171) to 7.3.26 (page 179). 

Major Concerns

31.     Core issues other than NFU not resolved are as under:-

(a)     Enhancement of Grade Pay

(b)     Initial fixation of Wg Cdr, Gp Capt and Air Cmde

(c)     Grant of HAG+ to Lt Gen

(d)     Common pay scale for JCO/OR.

(e)     Status equation not resolved.

(f)      Trade rationalization of JCO / OR not considered.

(g)     Disability as a percentage abolished.

(h)     Flying allowance not the highest risk allowance, Siachen allowance rate is higher than flying allowance.

(j)      Technical allowance Tier II rates abolished. 

(k)     Gp X Pay divided into two rates, higher rate of Rs 6200 for those with diploma and Rs 3600 for those without diploma in Gp X.