The 7th Central Pay Commission, headed by Justice A K Mathur, which submitted its report to Finance Minister Arun Jaitley on Thursday. The 900-page report of the Pay panel with recommendations will be implemented from January 1 next year.
The recommendations that will benefit 47 lakh central government employees and 52 lakh pensioners, which will impact the Central Budget by Rs 73,650 crore and the Railway Budget by Rs 28,450 crore. In a significant recommendation, the report favoured introduction of a health insurance insurance scheme for staff and pensioners and doubling the gratuity ceiling to Rs 20 lakh. The award of the pay panel will also benefit staff of autonomous bodies, universities and public sector units, Jaitley said after receiving the report.
The impact of recommendations would be an increase of 0.65 percentage of expenditure on salaries to GDP compared to 0.77 per cent in 6th Pay Commission. The report will be studied by a secretariat headed by Expenditure Secretary before government takes a final decision. The total salary and pension bill of the central government, which will also include railway employees, will go up from estimated Rs 4.33 lakh crore to Rs 5.35 lakh crore during 2016-17.
The panel has suggested abolition of the pay band and the grade pay, though it retained the annual increment of 3 per cent. It has also recommended a fitment factor of 2.57 which will be applied uniformly to all employees.
The Chairman and other member Dr Rathin Roy recommended the age of superannuation for all central armed forces personnel to be raised to 60 years from current 58 years, another member Vivek Rae did not agree with it. He endorsed the stand of Home Ministry. The formulation will bring parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.
In a significant recommendation, it enhanced the ceiling of gratuity from the existing Rs 10 lakh to Rs 20 lakh. And the same will be raised by 25 per cent whenever DA be raised by 50 per cent. In the new pay structure, the grade pay has been subsumed in the pay matrix and the status of the employee, now determined by grade pay, will now be determined by the level in the matrix.
Introduction of a health insurance scheme for employees and pensioners has been recommended. Meanwhile for the benefit of pensioners outside the CGHS areas, CGHS should empanel those hospitals which are already empanelled under CS(MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. All postal pensioners must be covered under CGHS. All postal dispensaries should be merged with CGHS.
The Commission has also recommended introduction of the Performance Related Pay (PRP) for all categories of Central Government employees, based on quality Results Framework Documents, reformed Annual Performance Appraisal Reports and some other broad Guidelines. It suggested that the PRP should subsume the existing Bonus schemes. It has suggested revision of rates of lump sum compensation for next of kin (NOK) in case of death arising in various circumstances relating to performance of duties, to be applied uniformly for the defence forces personnel and civilians including CAPF personnel.